NCBA Investment Bank has launched two offshore special funds for investors seeking exposure to international markets, joining other wealth managers that have introduced similar products that are popular with high-net-worth investors.
The company has joined other firms offering international market exposure including Standard Investment Bank (SIB) with MansaX and Faida Investment Bank with its OAK special fund.
The NCBA Global Equity and Fixed Income Special Funds will enable savers seeking long-term diversification to access international markets through a regulated, dollar-denominated structure.
The funds offer access to a wide range of global assets, allowing for diversification beyond traditional Kenyan unit trusts.
“These [funds] invest in assets around the world and nothing to do with Kenya, and the genesis of them was to help our clients diversify and have exposure to the global markets in a way that is safe. We are not trying to take risks but manage their money in a diligent and trustworthy way in order to earn a good return,” said Muathi Kilonzo, the managing director at NCBA Investment Bank.
The firm is looking to tap about 6,800 high net worth individuals, its diaspora clients and corporate customers engaging in international trade, with a minimum entry of $1,000 (Sh129,500) for each of the funds.
The funds rely on Exchange-Traded Fund portfolios that draw exposure from the United States, Europe, Asia and emerging markets.
“We're utilising our global presence, market knowledge and expertise to create a solid offshore investment setup.
Our goal is to ensure it meets all regulatory standards in various markets and truly connects with our clients' needs, helping them invest their capital safely while aiming for reliable returns,” Mr Kilonzo said.
“It was client demand. Our clients were asking us to start giving them a diverse bouquet of solutions, people wanted to invest outside Kenya and diversify, we are doing so elsewhere but they wanted a brand like NCBA to give them a solution.”
Fund managers have been keen to introduce and grow special investment schemes that typically charge higher fees, compared to traditional investment assets as more Kenyans seek to diversify their portfolios beyond the local equities and fixed income assets.
A special fund is a type of a collective investment scheme that invests based on a fund manager's strategy, and largely covers non-traditional assets such as real estate, private equity, offshore stocks and commodities.
The creation of the special funds has allowed fund managers to not only earn higher returns for clients from non-traditional assets such as offshore instruments but also helped them raise their fee income.
Total special funds’ assets under management touched Sh113.3 billion at the end of June this year, according to the Capital Markets Authority. The dramatic weakening of the shilling to record lows seen in January 2024, is among the reasons that have drawn investor interest in assets denominated in hard currencies.
