Mastering the Balanced Fund (B-Fund): The new focus on a ‘Mutual Monday’

It’s another Mutual Monday and the focus is now on the Databank Balanced Fund also known as the B-Fund. Before we look at this mutual fund, lets recap all we did on the journey to Mastering Mutual Funds in Ghana. I wrote on the following;
1. Mutual Monday: Investment Funds (Mutual funds & Unit Trusts) in Ghana.
2. Mutual Monday: What you must know about EPACK, the ‘Praise-the-Lord’ fund.
3. How to master mutual funds; focus on the iFUND mutual fund

In the above posts, I stated the various types of mutual funds and unit trusts in Ghana and went further to focus on EPACK and iFUND showing clearly what they invest your funds in.
In this particular post, I would look at what the B-fund is, how it operates, the requirements to start it, what it invests in and what type of investors  it might be suitable for.
The Databank Balanced fund is a medium to long-term fund which seeks to grow your capital and preserve your principal. It is a cedi investment (no foreign currencies)  that invests the mobilized funds from investors in high quality fixed income and equity instruments in a 50% / 50% ratio. Unlike EPACK that has no percentage specification for investing in fixed income securities or equities (stocks), the B-fund can only invest 50% into fixed income securities and 50% into equity instruments (stock market).
This fund is managed by Databank Asset Management Services Ltd. (DAMSEL) a subsidiary of Databank. The B-fund has a recommended minimum holding period of 3 years and individuals can start investing in this fund with a minimum lump sum of GHc 100 or a regular monthly investments of Ghc 10. There are charges one would incur for investing in a mutual fund. For this fund, one would be charged a commission of 1% per annum on any deposits, a management fee of 1.5% per annum and other expenses of 1.5% per annum.
Over the years, the B-FUND invested 40% of its funds into the Banking industry, 20% into Insurance industry, 20% into the Trading and Distribution industry and about 20% into Food and Household Products. This industry diversification was for only 47.52% of the total fund. In 2010, 52.48% of the total fund was invested in fixed income instruments and this was diversified as follows; Bonds = 2.76%, T-Bills = 2.20%, Fixed Deposits = 39.44%, Cash-Bank and Receivables = 8.08%.
Bellow is the Portfolio Summary for 2011;