Buoyed by increase in bond prices due to falling yields, Nigerian pension funds continued their conservative risk management strategy in February with most of their assets allocated to fixed income instruments with sovereign backing. As a result, they continued to gather positive gains in trickles to add to the gains already made the previous month.

The Retirement Savings Account (RSA) category made an average of 1.5%, with returns ranging from 3.22% to 1.54%. The greatest gainer is APT Pensions RSA fund, which we reported in January made a loss due to its high equity exposure. The performance of the equity market in February propelled the fund into becoming the sixth best performing Retirement Savings Account on a year to date basis in February, with a YTD return of 2.49%, a massive improvement from its negative 0.07 the month before.

The NSE Allshare Index gained 1,161 points or 3.8% to end the month of February at 31.718.7 points. That brought the YTD return of the NSE Allshare index to 0.92% from its previous month’s YTD return of negative 2.78%.

It was really a fight to finish for the RSA funds as most funds lost their January positions. Oaks Pensions RSA which had led the pack in January now occupies the second position after being out performed by PAL Alliance Pensions RSA whose big wins in February propelled to the first position as the best performing RSA fund with YTD return of 3.22%.

Data on First Guarantee Pensions RSA were not available and efforts to get such information yielded no result and as such, the performance is excluded from this report. Here are the 5 best performing RSA funds as at the end of January 2019.

Best Performing Fund:

Name of Fund: Pension Alliance RSA Pension Fund 2

YTD Performance %:  3.22%

YTD Gain per unit:  N0.11

Second Best Performing Fund:

Name of Fund: Oaks Pensions RSA Pension Fund 2

Coronation Research

YTD Performance %:  2.91%

YTD Gain per unit:  N0.08

3rd Best Performing Fund:

Name of Fund: Investment One Pensions RSA fund 2

YTD Performance %:  2.82%

YTD Gain per unit:  N0.07

4th Best Performing Fund:

Name of Fund: Fidelity Pensions RSA Fund 2

YTD Performance %:  2.76%

YTD Gain per unit:  N0.08

5th Best Performing Fund:

Name of Fund: AXA Mansard Pensions RSA Fund 2

YTD Performance %:  2.52%

YTD Gain per unit:  N0.07

Retiree Fund Performance:

Retiree Pension funds, otherwise known as fund 4, continued to perform better than their RSA fund counterparts because of their greater exposure to fixed income securities. On the average, Retiree funds generated a return of 2.05% in February 2019 with returns ranging from 4.66% to negative 0.8%%.

Investment One Retiree Fund took over as the best performing Retiree fund on a YTD basis in February, pushing last month’s leader, Pension Alliance Retiree fund, to the second position. Here are the best 5 Retiree funds. Below are the 5 best performing pension funds as at February 2019 based on year to date returns.

Best Performing Fund:

Name of Fund:  Investment One Pensions Retiree Fund 4

YTD Performance %:  4.66%

YTD Gain per unit:  N0.10

Second Best Performing Fund:

Name of Fund: Pension Alliance Retiree Fund 4

YTD Performance %:  2.81%

YTD Gain per unit:  N0.09

3rd Best Performing Fund:

Name of Fund: Fidelity Pensions Retiree Fund 4

YTD Performance %:  2.78%

YTD Gain per unit:  N0.08

4th Best Performing Fund:

Name of Fund: Legacy Pensions Retiree Fund 4

YTD Performance %:  2.41%

YTD Gain per unit:  N0.07

5th Best Performing Fund:

Name of Fund: AXA Mansard Pensions Retiree Fund 4

YTD Performance %:  2.33%

YTD Gain per unit:  N0.06

NSE Pensions Index Performance

Though we still believe that the NSE Pensions Index is not a good bench market for measuring the performance of pension funds in Nigeria, we continue to reference it in our analysis as it is the only available index for comparative analysis, at least for now. Compared to the NSE Pensions Index, which is predominantly equity based, both RSA and Retiree funds outperformed the index. The February YTD performance of the index stood at  0.31% , a far cry from the performances of the RSA and Retiree funds.

For a complete list of Retiree fund performance, contact Quantitative Financial Analytics Ltd.

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