Investment Policy

The principal objective of the Company is to provide a vehicle to facilitate broad public participation in a diverse portfolio of equity investments, bonds, property and equity of property companies and money market investments in Malawi.

The Company’s investment portfolio is managed by an independent fund manager, NICO Asset Managers Limited, whose management is subject to the overall direction of the Board of Directors of the Company. The Fund Manager has day-to-day control and discretion in the management of the investment portfolio in accordance with the investment policy. The investment portfolio is managed with a view to providing shareholders with a return by way of both annual income and capital growth. Subject to cash flow considerations, net after tax income, other than income from investment switches and unrealised net gains on the investment portfolio, is distributed to shareholders.

The Board of Directors recognises that there will always be risk present in any portfolio of investments but has adopted an investment policy which seeks to minimize that risk by defining permitted investments and placing limits on the extent of exposure to individual investments as follows:-

Equities

Up to 100% of the investment portfolio may be invested in equities provided that no more than 40% of the portfolio may be invested in any single listed company and no more than 10% of the portfolio may be invested in any single unlisted company.  Further limitations on investment in equities of property companies are set out below.

Bonds

Up to 25% of the investment portfolio may be invested in public or private sector bonds provided that no more than 10% of the portfolio may be invested in any single bond issue or series of bonds of a single private sector issuer.  It is a requirement that bonds must have a fixed redemption date and period to redemption of not more than ten years. Private sector bonds must be fully secured and public sector bonds must be guaranteed by the Government of Malawi.

Property and Equity of Property Companies

Up to 25% of the investment portfolio may be invested in properties or equity of property companies provided that no more than 10% of the investment portfolio may be invested in any single property investment.

Cash Equivalents

No restrictions are placed on short-term investments in the form of Treasury Bills, Reserve Bank Bills or deposits with licensed financial institutions.

Restrictions

The Fund Manager may not without the consent of the majority of the Board of Directors: acquire or dispose of any unlisted equities or bonds or enter into a contract on behalf of the Company to acquire or dispose of any unlisted equities or bonds, borrow money in the name of the Company, or pledge any property or assets belonging to the Company or create charges or mortgages thereon.