Net assets of the Vilhena Funds SICAV amounted to €172.13 million as at the end of the financial year ended 30 June. This was announced during the company’s 11th AGM held at the Portomaso Suite, Hilton Malta where the board of directors presented the annual report and financial statements of the company. All resolutions presented to the shareholders during the meeting were unanimously approved.
The company is licensed by the Malta Financial Services Authority as a Collective Investment Scheme qualifying as UCITS and offers a wide selection of funds, which invest across most asset classes and are exposed to different geographical regions. The company currently offers nine funds including the Vilhena Mediterranean Rim Fund, which is considered a unique fund as it invests across the emerging economies of the Mediterranean.
Following the general meeting, David Pace Ross from Bank of Valletta, which has been appointed sub-adviser to the Vilhena Malta Fund and the Vilhena Malta Government Bond Fund, spoke about the investment strategy and the asset allocation of both funds. He also outlined the local market highlights during the financial year ended 30 June, including the euro adoption, the trading activity on the Malta Stock Exchange, Corporate acquisitions, and Initial Public Offerings. He explained that although the Malta Stock Exchange Index registered a loss of 11.11 per cent between 30 and 30 June, the local companies underlying the Vilhena Malta Fund have strong fundamentals.
Mr Pace Ross commented that the outlook with respect to local equities in the light of current market conditions is “that the local financial institutions are well prepared and local equities are expected to enhance returns over time. Furthermore, new Initial Public Offerings should improve sector diversification which currently depends more than 50 per cent on HSBC Bank Malta, International Hotel Investments and Bank of Valletta”.
He added that the Vilhena Malta Fund invests in strong companies that offer long term potential and the Fund is an ideal vehicle through which one could have a diversified portfolio of local shares in such companies.
As to the local fixed interest market, Mr Pace Ross is of the opinion that considering the present market scenario, the bond prices should gradually move higher amid increased volatility. The Vilhena Malta Government Bond Fund with an income yield of 3.99 per cent, as at 31 October, offers a relatively stable investment opportunity as it invests primarily in Malta Government Bonds giving investors access to a diversified portfolio of local fixed interest securities.
Mark Vella, Head of Marketing at Valletta Fund Management, addressed the second part of the presentation. Mr Vella spoke on the performance of the international stock markets and economies as well as the various implications of the current crisis. Mr Vella commented, “Global markets suffered the biggest fall since 11 September 2001 and in order to try to improve the liquidity on the market various governments have intervened. A case in point is its biggest intervention yet; the Federal Reserve made $700 billion of funds available to banks and other institutions to try to improve liquidity on the market and similar initiatives were made by other European governments”. He explained that in order to avoid a possible US recession, the Federal Reserve cut its key interest rate from 1.5 per cent to one per cent. On the other hand, the Bank of England slashed interest rates unexpectedly from 4.5 per cent to three per cent – the lowest since 1955, while the European Central Bank lowered euro zone rates to 3.25 per cent from 3.75 per cent in an attempt to prevent recession.