Lotus Halal Investment fund, the flagship fund for Lotus Capital Asset Management posted a YTD return of 4.49% in June, representing annualized return of 9%.
This performance pales in the sight of its 2017 corresponding period return of 8.49% or annualized return of 17%. The fund which was launched in August 2008 and currently worth N2.46 billion has made a 29% since inception.
Most of the gain made so far in 2018 came from the funds investments in asset backed securities as the Nigeria equity market faltered in the second quarter of the year. The equity market saw a poorly performing Q2 due to less than expected corporate earnings results as well as increase in political risk.
Also to blame for the markets poor performance is the gradual exit of foreign portfolio investors as a result of the US Fed’s increase of interest rate and as a risk management strategy for the anticipated uncertainties of the forthcoming 2019 elections in Nigeria. All these factors culminated into the broad Nigerian Index, the Allshare Index losing a whopping 7.7% to end the quarter with a sorry .09% return
Though Q2 was not too good generally, Lotus Halal Investment fund managed to gather a total return of 2.17% to close the quarter with a Net Asset Value, NAV, per unit of N1.21. The fund’s YTD performance was however buoyed by dividend of N1.26 per unit representing a dividend yield of 4.1% declared and paid in January 2018
It takes a minimum of N5,000 initial capital to invest in the fund with subsequent investments in the multiples of N1,000. The fund has an expense ratio of 2.14% and charges 30% performance fee. Although no performance fees are chargeable or payable in the event of a loss in any financial year, it does not seem that the fund has a claw back provision where investors can recoup on past losses.
The Fund is said to be suitable for individuals and institutional investors as well as Pension Fund Administrators (PFAs) seeking long term capital growth through Shari’ah compliant ethical investments.