Investment Strategy

The core foundation of the Trust’s strategy is prudent diversification. This is re-enforced by investment obligations placed on Trustees as provided for in the PTRA.
In terms of the PTRA, the following are the three (3) important provisions regarding the Trust’s investments

1.The Trust is prohibited from carrying on permanent trading activities in raising its funds.
2.The Trust shareholding interest in any company is restricted to no more that 50% of the voting rights unless the company is PCL or connected thereto.
3.The Trust’s ownership of any assets with a development benefit to Malawi is limited to 50% of its total value and no more than 5% of the Trust’s income arising in a financial year may be invested in such assets.

Therefore, the main strategic goals of the Trust over the years have been to generate a regular and reasonable income stream by adopting a prudent approach towards investment activities and to generate steady and real capital and income growth while at the same time safeguarding the financial stability of the Trust. In particular, this means generating adequate income in form of dividends and interest and capital growth in form of capital gains on equity investments.

With regard to PTOL, the main strategic goal has been to maximise the long term total returns without undertaking any undue risks. In particular, the Trust has concentrated on maximising capital gains rather than dividend income.

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