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Nigeria’s mutual funds generate over N529billion in new investments in 2019

A review of the NAV Summary Report has disclosed that Nigerian mutual funds attracted N520,418,401,269.22, in contributions in 2019.

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Mutual Funds, Mutual Fund gone bad: Nigerian investor discloses his 10 years investment that nosedived , Nigeria’s mutual fund asset value reaches N1 Trillion

Not too long ago, I broke the news that the Nigerian mutual fund asset had hit and surpassed the trillion Naira mark. A review and detailed analysis of the NAV Summary Report, a publication by the Securities and Exchange Commission, has disclosed that Nigerian mutual funds attracted N520 billion in contributions in 2019.  That makes 2019 the year with the highest yearly contribution ever.

Increased awareness and the search for yield

The gigantic amount of contributions that the industry recorded in 2019 is not unconnected with the increase in awareness, occasioned by the numerous publications on mutual funds as well as enlightenment campaigns and advertisements by bloggers and fund managers.

The State of the Nigerian Mutual Funds Industry

Another factor that might have contributed to the increased contribution is the search for yield. The overall stock market was not that good in 2019, in fact, the Nigeria All Share index made a loss. The lackluster performance of the stock market pushed some investors to mutual funds, especially money market funds, thereby leading to increase in contributions to such funds.

Money market funds continue to be the darling of Nigerian mutual fund investors and the heartbeat of the industry. This resulted in much of the contributions making their way into money market funds. Of the three funds that attracted the highest contributions in 2019, Stanbic IBTC money market fund generated the highest contribution of N117.7 billionwhile FBN Money market fund gathered N109.6 billionin contributions.

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Stanbic IBTC Dollar fund is the only non-money market fund that made it to the top 3 with a contribution of N59.4 billion. In all, money market funds saw a total contribution of N364.17 billion representing about 70% of the entire new money that was poured into mutual funds in 2019.

[READ MORE: The State of the Nigerian Mutual Funds Industry)

Fear of depreciation

Motivated by the desire to hedge against the depreciation of the local currency, the Nigerian Naira, investors seem to be getting to know and embrace Nigeria’s Euro bond funds, or funds that are denominated in foreign currency. The Euro Bond fund category generated a total contribution of N77.07 billion.

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As noted already, Stanbic IBTC Dollar fund recorded the highest contribution in this category with N 59.4 billion. Currently, there are 7 Eurobond funds in Nigeria, according to the SEC NAV Summary Report. One advantage of investing in foreign-denominated mutual funds is that investors stand to gain not only from the performance of the funds but also from exchange rate changes.

Bond and fixed income funds not left out

Another category of mutual funds that attracted a sizable amount of new investments is Bond or Fixed Income funds. This category of mutual funds took in N44.47 billion in fund inflows, thanks to Stanbic IBTC bond fund that generated N10.88 billion to place itself on the record as the bond fund with the highest contribution in 2019.

Chapel Hill Denham Nigeria Infrastructure fund, the only fund in the infrastructure fund category, amassed total contribution of N23.05 billion to double its asset value in 2019.

Money market fund investments

There were redemptions too

It was not all that particularly rosy for the industry, as investors pulled out approximately N140 billion by way of redemptions from various mutual funds. FBN Money market fund suffered the largest redemption of N45.45 billion while Chapel Hill Denham Nigeria Infrastructure fund saw about N13 billion leaving.

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Abacus Money market fund and Stanbic IBTC money market funds also witnessed an elevated amount of redemptions in the sums of N10.6 and N9.8 billion respectively. Just like money market funds recorded the highest amounts of contributions, they also suffered the highest amount of redemptions, although in no proportionate terms.

Stanbic IBTC

All said and done, the industry ended the year 2019 with net positive flow of N380.5 billion, to hit an all-time high of N1.042 trillion in asset value, placing the industry on a better footing for the future.

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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Companies

PZ Cusson announces retirement of Chairman, Kola Jamodu

PZ has announced the retirement Chief Kola Jamodu as Non-Executive Director and Chairman of the Board of the company.

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Kola Jamodu

The Board of Directors of PZ Cussons Nigeria Plc has announced the retirement of Chief Kola Jamodu as Non-Executive Director and Chairman of the Board of the company.

This disclosure was made in a notification signed by the Company’s Secretary, Jacqueline Ezeokwelume, and sent to the floor of the Nigerian Stock Exchange.

According to the notification issued by Mrs. Ezeokwelume, Chief Kola Jamodu will retire as a Non-Executive Director and Chairman of the Board effective 11 December 2020 to enable him to pursue other personal endeavours.

What you should know

Chief Jamodu joined PZ Cussons Group in 1974 and served in Executive positions for 24 years rising to the position of Chief Executive Officer of the Company, a position he held until he retired in 1999.

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He thereafter continued as a Non-Executive Chairman of the Board until 2001 when he was appointed as the Honourable Minister of Industry of the Federal Republic of Nigeria, a position he held until 2003.

He was reappointed as the Chairman of the Board of PZ Cussons Nigeria Plc in November 2014.

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Appointments

Abbey Mortgage Bank announces appointment of 6 Directors

The Central Bank of Nigeria has approved the appointment of 6 Directors of Abbey Mortgage Bank.

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Abbey Mortgage Bank announce the appointment of substantive Managing Director, and 5 Directors.

Abbey Mortgage Bank has announced the appointment of 6 Directors, including Mr. Madu Hamman as the substantive Managing Director.

The disclosure is contained in a notification, signed by the Bank’s Secretary, Geoff Amaghereon Esq. and sent to the Nigerian Stock Exchange market today, as seen by Nairametrics.

What you should know

Five (5) other Directors were appointed by the CBN – 2 Executive and 3 Non-Executive Directors.

The names and portfolios of the Directors are; Mr. Mobolaji Adewumi – Executive Director; Mr. Oladipupo Ayodele Adeoye – Executive Director; Mr. Nonso Okpala – Non-Executive Director; Professor Marius N. Umego – Non-Executive Director; and Brigadier-General John Obasa (rtd) – Non-Executive Director.

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The notice also mentioned that all appointments have been approved by the Central Bank of Nigeria.

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Obituaries

Just-in: Diego Armando Maradona is dead

Argentine football star, Diego Armando Maradona is dead.

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Argentine football star, Diego Armando Maradona is dead.

This was disclosed by the Premier League via its Twitter handle on Wednesday evening.

It tweeted, “We are deeply saddened to hear of the passing of footballing great, Diego Maradona, an extraordinarily gifted footballer who transcended the sport.

“Our thoughts and sincere condolences to Diego’s family, friends and those who knew him.”

He reportedly died of a heart attack on Wednesday at his home in the outskirts of Buenos Aires.

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Maradona, 60, had recently battled health issues and underwent emergency surgery for a subdural haematoma several weeks ago.

 

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Details soon …

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