Mutual Funds

There is no doubt that 2018 was quite a challenging year for investors all over the world. The global market remained very volatile for a greater part of the year as a result of the aftermath of the Brexit debacle in Britain, Trump’s decision of lack of what and what not to impose tariffs on and retaliations from China, not to talk about the ups and downs in the global oil market. On top of those, was the uncertainties that the Nigerian economy witnessed within the year as a result of the upcoming national election as well as the seemingly insurmountable onslaught by Boko Haram. The summary of those is that the Allshare index lost 6,812 points or 17.81% of its value in 2018.

However, some mutual funds were spared the agony of the poor market performance. One of such funds is the Stanbic IBTC Guaranteed Income Fund which made14.41% in 2018. This favourably compares with its 2017 performance of 19.03% and brings its 3 year and 5 year returns to 49.94% and 75.98%. Since inception in December 2007, the Stanbic IBTC Guaranteed Income Fund has returned 190.23%. With that performance, the fund beat its benchmark index which returned 3.74% in 2018. Also, the 3-year and 5-year performances far out perform those of the underlining index.

About the IBTC Guaranteed Income Fund

The Stanbic IBTC Guaranteed Income Fund aims to achieve both capital preservation and growth by investing a minimum of 75% of the portfolio in high quality fixed income securities while a maximum of 25% can be invested in listed equities. The Fund guarantees principal amount against diminution in value provided the investment is held for a minimum period of three months. It requires initial investment of N5,000 to buy into the fund and subsequent investments are required to be in multiples of N5,000

Stanbic IBTC Bond Fund too

Like Stanbic IBTC Guaranteed Income Fund, Stanbic IBTC Bond Fund returned 10.79% in 2018 which falls short of the 17.94% recorded in 2017. The fund has a 3-year and 5-year returns of 40.92% and 77.14%. Since the fund was launched in February 2010, it has made an inception to date return of 142.02%.

Although the fund’s performances looks stellar, it has underperformed its benchmark index which made 12.96% in 2018, resulting in 3-year and 5-year returns of 45.71% and 82.3% respectively; although the fund beat its index’s 2017 performance of 15.1%.

Though the Stanbic IBTC Guaranteed Income Fund and Stanbic IBTC Bond Fund made good gains as noted above, it is not so good for other funds being managed by Stanbic IBTC. Majority of the funds being managed by Stanbic IBTC made losses in 2018 especially those that have equity market exposures.

Stanbic IBTC Nigerian Equity Fund

Stanbic IBTC Nigerian Equity Fund, which is predominantly an equity-based fund returned minus 12.24% in 2018, a far cry from its 27.26% return in 2017. The fund which has a 3-year and 5-year returns of 17.91% and negative 28.29% respectively and has yielded a return of 235.24% over the last 15 years and 886% over the last 20 years. The fund thrives whenever the equity market does well because of the high correlation between the stock market and the fund. Other Stanbic IBTC managed funds, with equity exposures that did not do so well include Stanbic IBTC ETF 30 which returned negative 18.88% in 2018, Stanbic IBTC Imaan Fund with 2018 return of negative 9.07%, Stanbic IBTC Pension ETF 40, with negative 15.48% and Stanbic IBTC Ethical Fund which generated a 2018 return of negative 4.9%. A download of the consolidated factsheet of the funds will provide a first hand information of the funds and their respective performances.

Best Fund Manager in Nigeria

Inspite of the poor performance of the equity-based funds managed by Stanbic IBTC, it does not undermine the fact that Stanbic IBTC is the largest fund manager by asset value and number of funds under management in Nigeria. Stanbic IBTC as a fund manager is the most transparent in Nigeria as it releases its valuations daily as well as being the best if not the only fund manager with the most current factsheets of its funds.

It will be of no surprise to anyone that has been following the Nigerian mutual fund’s industry that Stanbic IBTC Asset Management Company was awarded the Asset Management Company of the year 2018, Largest Fund Manager om FMDQ, 2018, and Best Mutual Fund Provider in Nigeria, 2018 by the Global Banking and Finance Review.

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Uchenna Ndimele is the President of Quantitative Financial Analytics Ltd. and (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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