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Funds Management

Lotus Halal Investment Fund posts a 4.49% return

Lotus Halal Investment fund posted a YTD return of 4.49% in June.

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Lotus Capital

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.

Uchenna Ndimele is the President of Quantitative Financial Analytics Ltd. MutualfundsAfrica.com and mutualfundsnigeria.com (both Quantitative Financial Analytics company website) is a leader in supplying mutual fund information, analysis, and commentary on African mutual funds. We provide reliable fund data; and ratings information that will add value to fund managers, the media, individual investors and investment clubs.

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    Funds Management

    Nigeria’s pension asset dips N51.3 billion in February 2021

    Nigeria’s pension asset fell to its lowest position in four months, lost N51.3 billion in February 2021

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    Nigerian Pension funds, 2019 pension fund performance ranking

    Nigeria’s total pension assets lost a total of N51.3 billion to stand at N12.25 trillion in the month of February 2021. This is according to the monthly pension report released by the Nigerian Pension Commission.

    According to data compiled by Nairametrics Research, Nigeria’s pension assets fell to their lowest position in four months, characterized by the decline in bond prices, and profit-taking activities in the Nigerian equity market.

    READ: Best Pension Funds in Nigeria for the month of February 2021

    Highlights

    • The total pension asset declined by 0.42% from N12.29 trillion recorded as of January 2021 to N12.25 trillion in February 2021.
    • Federal Government bonds stood at N7.34 trillion, accounting for 59.6% of the total pension asset under management.
    • Also, local money market securities, which stood at N1.62 trillion as of February 2021, accounted for 13.4% of the gross asset for the period under review.
    • Mutual funds recorded a decline of 1.3% to stand at N158.96 billion from N162.1 billion recorded in the previous month.
    • However, treasury bills increased by 5.5% from N670.34 billion recorded as of the last day of January 2021 to N676.91 billion at the end of February 2021.

    READ: How foreign exchange risks and others affect the Nigerian pension industry 

    A cursory look at the data revealed that the pension asset had reduced by N6.93 billion in the previous month, before losing N51.28 billion in the period under review.

    As of February 2021, RSA Fund II accounted for 43.82% of the total pension asset, as it stood at N5.37 trillion, followed by Fund III with N3.16 trillion (25.79%), and CPFAs at N1.47 trillion (11.98%).

    Why the decline?

    While responding to questions regarding the recent decline in pension fund assets, Oguche Agudah, the CEO of Pension Fund Operators Association of Nigeria (PenOp), stated that it was due to the decline in prices of fixed securities.

    • He, however, called on pension contributors to increase their contributions as that would guaranty more funds. He also called on employers in the private and government sector to remit due pension contributions.
    • Commenting on the reasons for the loss, Mrs Amaka Andy-Azike, the head of branding and communication of PenOp, stated that the losses are however unrealized losses and would have recovered in the month of March as the yield of government securities continues to trend upward.
    • She, therefore, called on pension contributors to be calm as there was no cause for worry. Mrs Amaka also reiterated that the pension scheme prioritises secured investments rather than riskier instruments that could yield higher returns.
    • Nairametrics had reported that Nigerian Pension Fund Administrators across the different fund types, dipped significantly in the month of February 2021 as only 22% of the funds recorded positive growth in the month.

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    Funds Management

    Nigeria’s Best performing Mutual Funds in Q1 2021

    The Net Asset Value of the listed Nigerian Mutual Funds dipped by 4.01% in Q1 2021

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    Best Mutual Funds in Nigeria

    Mutual Funds in Nigeria recorded a bearish performance in the first quarter of 2021 as only 25 funds posted positive growth in the review month against 59 declines while 34 funds remained flat in March.

    Mutual funds have been considered as a good alternative investment opportunity, particularly for retail investors because it gives them access to diversified and professionally managed portfolios at a low price.

    However, data obtained from the Security and Exchange Commission revealed that on average, the 118 listed funds as of 31st March 2021, dipped by 1.91%, having recorded a similar decline in the month of February.

    • Also, the net asset value declined by 4.01% from N1.57 trillion as of 31st December 2020 to N1.51 trillion as of 1st April 2021.
    • This is could be partly attributed to the bearish performance recorded in the Nigerian Stock Exchange market as data from the NSE showed that the All-Share Index dipped by 3.63% year to date as of April 1, 2021.
    • A comparison of the performance of the fund types indicated that despite the fall in total net asset value in Q1 2021, Bond funds grew by +14.82%, Ethical funds by +12.95%, Fixed income funds by +12.91%.
    • Real estate funds and infrastructure funds grew marginally by +0.69% and +0.43% respectively. Other funds recorded losses with the money market funds recording the highest loss of -20.68%.

    Nairametrics tracked the performance of these mutual funds by comparing the fund prices as of 31st December 2020 with the fund prices as of 1st of April 2021.

    Below were the top-performing mutual funds in Q1 2021. We also highlighted their performance in terms of changes in net asset value and included profiles of the funds as described on their websites.


    ARM Ethical Fund – Asset & Resources Mgt. Company Ltd. (Ethical Funds)

    The ARM Ethical Fund is suitable for Islamic investors who want long-term capital growth by investing strictly according to the principles of Islamic finance and ethical values. The Fund invests only in investments screened by a Shari’ah Advisory Board.

    It invests in equities, real estates, and other investments that do not involve interest-bearing transactions.

    December 31st, 2020

    Fund Price – N35.46

    April 1st, 2021

    Fund Price – N36.55

    Return – 3.06%

    Ranking – Fifth

    Commentary: The ARM Ethical Fund was the fifth-best performing fund in the first quarter of the year. The unit price appreciated by 3.06% while the net assets value increased by 3.15% from N358.96 million as of 31st December 2020 to N370.27 million as of 1st April 2021.

    Jaiz bank

    Vantage Dollar Fund – Investment One Funds Management (Fixed Income Fund)

    Vantage Dollar Fund is an open-ended Unit Trust Scheme by Investment One Funds. The Fund seeks to provide investors with a bias for Dollar-denominated securities and access to such securities, which ordinarily would be inaccessible to them by virtue of the minimum amount typically required to make such investments.

    December 31st, 2020

    Fund PriceN502.90

    April 1st, 2021

    Fund PriceN518.95

    Return – 3.19%

    Ranking – Fourth

    Commentary: The Ventage Dollar fund performed as the fourth-best performing fund in the first quarter of the year. The unit price appreciated by 3.19% while the net assets value declined by -2.97% from N1.85 billion as of December 31st, 2020 to N1.79 billion as of April 1st 2021.

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    FSDH Dollar Fund – FSDH Asset Management Ltd. (Fixed Income Funds)

    This is an open-ended mutual fund that invests in US Dollar denominated Fixed Income Securities issued by Nigerian Sovereign and Corporate Entities. The objective of the fund is to provide customers with the opportunity to invest in dollar-denominated instruments.

    The minimum amount required to invest in the fund is $1,000.

    December 31st, 2020

    Fund Price – N415.10

    April 1st, 2021

    Fund Price – N431.44

    Return – 3.94%

    Ranking – Third

    Commentary: The FSDH Dollar Fund was the third best performing fund in the first quarter of the year. The unit price appreciated by 3.94% while the net assets value increased by 41.99% from N846.27 million as of December 31st, 2020 to N1.2 billion as of April 1st 2021.


    FBNQuest Asset Management Limited – Institutional (Bond Funds)

    The FBN Nigeria Eurobond (USD) designed for institutional investors is also invested in US Dollar-denominated debt instruments issued by the Nigerian government and reputable corporate institutions and managed by FBNQuest Asset Management Limited.

    To begin investment as an institutional investor, a minimum of $100,000 is required for a minimum tenor of 180 days.

    December 31st, 2020

    Fund Price – N49,283.56

    April 1st, 2021

    Fund Price – N51,682.31

    Return – 4.86%

    Ranking – Second

    Commentary: The FBNQuest Asset Management Limited bond funds created for institutional investors was the second best performing fund in the first quarter of the year. The unit price appreciated by 4.86% while the net assets value increased by 5.69% from N571.01 million as of December 31st, 2020 to N603.51 million as of April 1st 2021.


    FBNQuest Asset Management Limited – Retail (Bond Funds)

    The FBN Nigeria Eurobond is a fixed income mutual fund that invests in the US Dollar-denominated debt instruments issued by the Nigerian government and reputable corporate institutions. Investments can be made into this fund by both retail and institutional investors.

    To get started as a retail investor, a minimum investment of $2,500 is required and the minimum holding period is 180 days.

    December 31st, 2020

    Fund Price – N49,346.65

    April 1st, 2021

    Fund Price – N51,751.89

    Return – 4.87%

    Ranking – First

    Commentary: The FBNQuest Asset Management Limited bond funds created for retail investors was the First best performing fund in the first quarter of the year. The unit price appreciated by 4.87% while the net assets value increased by 18.29% from N4.57 billion as of December 31st, 2020 to N5.41 billion as of April 1st 2021.


    Bubbling under

    • Legacy Equity Fund – 1.95%
    • PACAM Equity Fund – 1.81%
    • Stanbic IBTC Shariah Fixed Income Fund – 1.66%
    • AVA GAM Fixed income Dollar Fund – 1.65%
    • United Capital Fixed – 1.51%

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