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Business News

Top 10 high-yield money market funds that beat inflation in Nigeria

Sometimes, the fear of poor stock market performance forces conservative and risk-averse investors to sit on their cash…

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Top 10 high-yield money market funds that beat inflation in Nigeria

It is not uncommon, but a risk management strategy for investors (who worry that stocks are either too expensive or not performing well), to buy some downside protection with yield. On the alternative, sometimes, the fear of poor stock market performance forces conservative and risk-averse investors to sit on their cash rather than risk the possible loss in the market. But prudence requires striking a balance between sitting on “barren” cash and losing it all in the market. This is where money market funds come in and play that risk management role of not losing the yield that would have, otherwise, been lost if an investor sits on his or her cash instead of losing it all due to poor performance in the stock market.

Money Market Fund Yield Vs Inflation Rate

The role of money market funds in giving investors the best of both Worlds, is even more so when the yields on such funds out-pace the rate of inflation. The latest available data from the National Bureau of Statistics indicates that the rate of inflation moderated slightly in February to 11.31%. With that, inflation rate has fallen for the second consecutive month. This is good news given that inflation rate in Nigeria has historically averaged 12.46% since 1996 to 2019, although it reached an all time high of 47.56% in January 1996.

For investors, especially those investing in fixed income and money market funds, this news may be heart warming as the relationship between inflation and money market yield is an important decision variable. Analysts at Quantitative Financial Analytics went around to find out the current yield on money market funds in Nigeria with a view to comparing it with inflation.

According to the data gathered by Quantitative Financial Analytics, the average interest rate on money market funds is currently 13.06% per year. This means that with 11.31 percent annual inflation, N100,000 invested in a money market account at 13.06% percent would gain about N1,750 in purchasing power over the course of a year. That may not be too encouraging but it is better than losing out in purchasing power terms.

Shop Around for High Yield

Investors can do quite a bit better than 13.06% percent if they shop around for higher paying funds. To help in this shopping, here are the top 10 high yield money market mutual funds in Nigeria:

(1) United Capital Money Market Fund:

Yield: 14.6%
Expense Ratio:1.6%
Fund Manager: United Capital Asset Management Company.

(2) FBN Money Market Fund:

Yield: 14.37%
Expense Ratio:0.9%
Fund Manager: FBN Asset Management Company.

(3) ARM Money Market Fund:

Yield: 13.76%
Expense Ratio: Not Available
Fund Manager: ARM Asset Management Company.

(4) Stanbic IBTC Money Market Fund:

Yield: 13.34%
Expense Ratio: Not Available
Fund Manager: Stanbic IBTC Asset Management Company.

(5) AIICO Money Market Fund:

Yield: 13.28%
Expense Ratio: Not Available
Fund Manager: AIICO Asset Management Company.

Jaiz bank

(6) Cordros Money Market Fund:

Yield: 13.27%
Annual Management Fee: 1%
Fund Manager: Cordros Asset Management Company.

(7) Coronation Money Market Fund:

Yield: 13.27%
Expense Ratio: 0.29%
Fund Manager: Coronation Asset Management Company.

(8) Greenwich Plus Money Market Fund:

Yield: 13.25%
Expense Ratio: Not Available
Fund Manager: Greenwich Asset Management Limited.

(9) PACAM Money Market Fund:

Yield: 12.96%
Annual Management Fee: 1%
Fund Manager: PACAM Asset Management Limited.

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(10) AXA Money Market Fund:

Yield: 12.96%
Annual Management Fee: 1.25%
Fund Manager: AXA Asset Management Limited.

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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          Coronavirus

          COVID-19: US Government to support vaccine intellectual property waiver

          The US government has announced that it supports the waiver of Intellectual Property Protections on Covid-19 vaccine development.

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          AstraZeneca suspends COVID-19 vaccine final stage trial over safety concerns, COVID-19: J&J starts vaccine trials on humans after success on monkeys

          The United States government has announced that it supports the waiver of Intellectual Property Protections on Covid-19 vaccine development, in a bid to boost the fight against the pandemic, and says it will participate in the Okonjo-Iweala-led WTO negotiation to make it happen.

          This was disclosed in a statement by Ambassador Katherine Tai, the US Trade Rep, on Wednesday evening.

          What the statement on Covid-19 IP waiver said

          “The administration believes strongly in intellectual property protections, but in service of ending this pandemic, supports the waiver of those protections for Covid-19 vaccines.

          We will actively participate in text-based negotiations at the World Trade Organization (WTO) to make this happen.

          The Administration’s aim is to get as many safe and effective vaccines to as many people as fast as possible.”

          They added that they would continue working with the private sector and all possible partners to expand vaccine manufacturing and distribution.

          What you should know

          Recall Nairametrics reported earlier that World Trade Organization’s Director-General, Dr Ngozi Okonjo-Iweala, had warned that “vaccine nationalism” could affect the much-expected pandemic recovery, as well as decimate economic growth for all countries – rich and poor.

          “A very top priority for me would be to make sure that prior to the very important ministerial conference … that we come to solutions as to how the WTO can make vaccines, therapeutics and diagnostics accessible in an equitable and affordable fashion to all countries, particularly to poor countries,” she added.

          Hotflex

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          Hospitality & Travel

          NGX lauds Transcorp Hotels over operational efficiency

          Transcorp Hotels Plc achieved business continuity by enhancing the organization’s operational efficiency.

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          COVID-19: Transcorp Hotel loses about N1 billion every month- CEO

          The Nigerian Exchange (NGX) Limited has lauded the efforts made by the Board and Management of Transcorp Hotels Plc towards achieving business continuity by enhancing the organization’s operational efficiency.

          NGX also congratulated the Group on the successful unveiling of new product lines and efforts towards repositioning the organization, thereby reassuring investor confidence in the company.

          This was disclosed by the Divisional Head, Listings Business, NGX, Mr Olumide Bolumole, when the management of the Hotel led by the Managing Director (MD)/Chief Executive Officer (CEO), Transcorp Hotels, Mrs Dupe Olusola, presented its Facts Behind the Figures to capital market stakeholders.

          Speaking at the event, Mr Bolumole said, “Recently, NGX hosted the CEO, Transcorp Hotels Plc, Mrs Dupe Olusola to a digital Closing Gong Ceremony to commemorate the formal listing of their ₦10Billion rights issue.

          We are pleased that Transcorp Hotels has again chosen to utilise our platform to engage the market about the financial performance as well as strategic and operational developments within the organization.

          The Exchange recognizes the efforts made by the Board and Management of Transcorp Hotels Plc towards achieving business continuity by enhancing the organization’s operational efficiency. We congratulate you on the successful unveiling of new product lines and efforts towards repositioning the organization, thereby reassuring investor confidence in the company.”

          What Transcorp is saying

          Olusola noted that “Despite the adverse effect of the COVID 19 pandemic on all our business segments, Transcorp Hotels Plc remained resilient and took a critical and fundamental decision to remain open and maintain operations at both the Transcorp Hilton Abuja and Transcorp Hotels Calabar.

          Our primary goal was to survive as individuals and as a business, to adapt and to thrive in a new, changing, and unprecedented environment. Post-COVID-19 starting from September, we recorded an improvement in all our KPIs as compared with the industry performance.

          Hotflex

          Today, leisure has become very important to us more than ever. As a hospitality business, we will constantly continue to challenge ourselves to ensure that we meet the diverse customer needs and provide excellent experience across all touchpoints.”

          What you should know

          Given that information asymmetry affects the decision-making of investors, NGX continues to encourage more issuers to take advantage of its platform to deliver timely, relevant, and accurate information to the market.

          Continue Reading

            





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