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Vantage, IBTC, PACAM, Legacy, 5 others join mutual funds league in 2019

SEC has been doing its best to publish, as often as it can, a compilation of the Net Asset Values of Nigerian mutual funds.

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SEC, security and exchange commission, The State of the Nigerian Mutual Funds Industry

One of the problems that are prevalent in Nigeria is that of paucity of data. Though that problem still bedevils the Nigerian mutual fund industry, the Security and Exchange Commission (SEC) has been doing its best to publish, as often as it can, a compilation of the Net Asset Values of Nigerian mutual funds.

One way to judge the health of an industry like the mutual fund industry is to look at the trends of fund flows into and out of the industry. In one of my recent pieces, I pointed out that the state of the industry seemed to be strong, and judging by how much investors poured into the industry in 2019, the state of the industry seems to be even stronger.

Nine funds that joined the league of mutual funds in 2019

Another way to judge the health of the industry is to look at its growth in terms of the number of funds, especially number of new funds, launched within a review period or year.  Due to lack of alternative facts, our analysis is based solely on the publications by the Security and Exchange Commission.  Based on the SEC NAV Summary reports, we can comfortably say that Nine new funds were added to the list of active mutual funds in Nigeria in 2019.

That is a slight improvement over the 8 new funds that were added in 2018, but nothing compared with the 16 new funds added in 2017. Be that as it may, the fact that the industry added more funds, with none going into extinction, is quite commendable and a mark of growth. Here are the newcomers in 2019.

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Vantage Dollar Fund and Vantage Equity Income Fund

Vantage Dollar fund is a Eurobond fund, being denominated in US Dollar. It is a product of InvestmentOne Fund management. Though the fund opened for issue on April 23 2018, closing on June 1, 2018, it did not get listed in the SEC report until sometime in 2019, making it a newcomer in 2019. Its current asset value is N1.8 billion and the fund generated about N78 million in gains in 2019. InvestmentOne also launched the Vantage Equity Income Fund.

[READ MORE: Nigeria’s mutual funds generate over N529billion in new investments in 2019)

That brings to 6, the number of funds being managed by InvestmentOne Asset Management, giving it a total asset under management of N21.6 billion.

  • Another newcomer in 2019 is the IBTC Shariah Fixed Income Fund. The Fund is an “open-ended unit trust scheme that invests in Shariah-Compliant fixed income securities and investment products that are permissible under Shariah principles.” A product of Stanbic IBTC Asset Management, the fund was valued at N1.5 billion by the end of 2019 and generated an estimated N54.6 million in gains also in 2019. With that, the number of funds under the management of Stanbic IBTC Asset Management company now comes to 14, with total asset undermanagement of N478.2 billion as at the end of 2019.
  • PACAM Eurobond fund and PACAM Equity Fund also made it to the list of newcomers in 2019. Though PACAM Eurobond fund is said to be Eurobond fund, at least by nomenclature, the fund manager’s website says that the fund invests in “Fixed Income instruments such as FGN Bonds, Sub National Bonds, Corporate Bonds and other investment-grade Fixed income instruments giving investor’s opportunity to invest in secure and high yielding Bonds offered by Federal and State Governments of Nigeria and large Corporates.” The launch of the two funds brings to 5, the number of funds being managed by PACAM Asset Management company, bringing its asset under management, AUM, to N1.56 billion.
  • Lead Balanced fund also got enlisted in the SEC NAV Summary Report for the first time in 2019. A product of Lead Asset Management, the fund is an Open-Ended Fund authorized and registered in Nigeria as a Unit Trust Scheme. Aimed at achieving capital appreciation by holding long-term positions in different asset classes and provide regular income streams for unit holders, Lead Balanced fund was valued at N475 million at the end of 2019, after making about N10.57 million in gains. Lead Asset management now manages 2 funds with combined AUM of N566 million.
  • Legacy Money Market: Not wanting to be undone by other asset managers, First City Asset Management launched its Legacy Money Market fund, to bring the funds under its management to 4, and total asset under its management to N20.5 billion.
  • Growth & Development Asset Management Limited also debuted in the Nigerian mutual fund industry with its GDL Money market fund, an open-ended mutual fund that invests in a broadly diversified portfolio of short-term, high-quality money market securities such as Treasury Bills, Commercial Papers, Bankers Acceptances and Certificate of Deposits issued by rated banks in Nigeria. With that, Growth & Development Asset Management Limited, GDL, gets set to make its mark in the industry with its current AUM of N896 million.
  • FSDH Treasury Bill Fund: 2019 saw what could be known as Nigeria’s first and only Treasury Bill fund, with the launch of FSDH Treasury Bill Fund by FSDH Asset Management.  Though a money market fund by its characteristics, the FSDH Treasury Bill Fund “provides investors with the opportunity to invest in a range of Treasury Bills across different tenors” in Nigeria. That brings the number of funds being managed by FSDH Asset Management to 4 and its total asset under management stood at N44 billion as at the end of 2019.

[READ ALSO: How to build a profitable Mutual Fund Portfolio)

Conclusion

There is no doubt that the Nigerian mutual fund environment is still evolving and a fertile ground for innovation and product development. A lot of progress has been made, and a lot more needs to be made. One area that is yearning for attention is the area of fund of funds. We are watching to see who launches the first fund of funds in Nigeria.

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.

4 Comments

4 Comments

  1. Anonymous

    January 30, 2020 at 7:25 am

    Anytime I read any captivating article on this platform, I assume that it will definitely be Uche Ndimele and whenever I check you don’t dissappoint. Keep up the good work

  2. Uchey Ndimele

    January 30, 2020 at 2:13 pm

    This is flattering, Thank you so much for your kind comments, they are the energy that I need to do more. Enjoy your day

  3. Eziaku

    April 4, 2020 at 5:27 am

    I need to invest in mutual fund, which one is good for me as a starter

  4. Abu

    May 17, 2020 at 4:01 pm

    Great piece. What’s fund for fund?

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Coronavirus

COVID-19 Update in Nigeria

On the 23rd of September 2020, 111 new confirmed cases and 2 deaths were recorded in Nigeria

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The spread of novel Corona Virus Disease (COVID-19) in Nigeria continues to record increases as the latest statistics provided by the Nigeria Centre for Disease Control reveal Nigeria now has 57,724 confirmed cases.

On the 23rd of September 2020, 111 new confirmed cases and 2 deaths were recorded in Nigeria, having carried out a total daily test of 3,177 samples across the country.

To date, 57,724 cases have been confirmed, 48,985 cases have been discharged and 1,102 deaths have been recorded in 36 states and the Federal Capital Territory. A total of 484,051  tests have been carried out as of September 23rd, 2020 compared to 480,874 tests a day earlier.

COVID-19 Case Updates- 23rd September 2020,

  • Total Number of Cases – 57,724
  • Total Number Discharged – 48,985
  • Total Deaths – 1,102
  • Total Tests Carried out – 484,051

According to the NCDC, the 111 new cases were reported from 12 states- Lagos (31), Gombe (18), Kaduna (18), FCT (15), Rivers (14), Imo (3), Kwara (3), Oyo (3), Bayelsa (2), Ogun (2), Edo (1), Osun (1).

Meanwhile, the latest numbers bring Lagos state total confirmed cases to 19,086, followed by Abuja (5,598), Plateau (3,304), Oyo (3,236), Edo (2,616), Kaduna (2,377), Rivers (2,277), Delta (1,800), Ogun (1,774), Kano (1,734), Ondo (1,606), Enugu (1,285), Ebonyi (1,038), Kwara (1,028), Abia (881), Gombe (857). Katsina (848), Osun (818),  Borno (741), and Bauchi (692).

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Imo State has recorded 565 cases, Benue (473), Nasarawa (449), Bayelsa (397),  Jigawa (322), Ekiti (317), Akwa Ibom (288), Niger (259), Adamawa (234), Anambra (232), Sokoto (161), Taraba (95), Kebbi (93), Cross River (85), Zamfara (78), Yobe (75), while Kogi state has recorded 5 cases only.

READ ALSO: COVID-19: Western diplomats warn of disease explosion, poor handling by government

Lock Down and Curfew

In a move to combat the spread of the pandemic disease, President Muhammadu Buhari directed the cessation of all movements in Lagos and the FCT for an initial period of 14 days, which took effect from 11 pm on Monday, 30th March 2020.

The movement restriction, which was extended by another two-weeks period, has been partially put on hold with some businesses commencing operations from May 4. On April 27th, 2020, Nigeria’s President, Muhammadu Buhari declared an overnight curfew from 8 pm to 6 am across the country, as part of new measures to contain the spread of the COVID-19. This comes along with the phased and gradual easing of lockdown measures in FCT, Lagos, and Ogun States, which took effect from Saturday, 2nd May 2020, at 9 am.

On Monday, 29th June 2020 the federal government extended the second phase of the eased lockdown by 4 weeks and approved interstate movement outside curfew hours with effect from July 1, 2020. Also, on Monday 27th July 2020, the federal government extended the second phase of eased lockdown by an additional one week.

On Thursday, 6th August 2020 the federal government through the secretary to the Government of the Federation (SGF) and Chairman of the Presidential Task Force (PTF) on COVID-19 announced the extension of the second phase of eased lockdown by another four (4) weeks.

READ ALSO: Bill Gates says Trump’s WHO funding suspension is dangerous

 

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Economy & Politics

Buhari to finally send Petroleum Industry Bill to National Assembly next week

Sources in the Presidency have disclosed that the President may be presenting the bill to the National Assembly.

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Four dangerous circumstances forces FG to close Enugu Airport until further notice, aviation sector. FG’s conditional cash transfer progarmme gets more beneficiaries despite criticism

President Muhammadu Buhari is expected to present the long-awaited Petroleum Industry Bill (PIB) to the Senate as early as next week.

According to Reuters, who were quoting 4 sources familiar with the development, the presentation of the bill to the National Assembly, follows its official approval by the president late last week. This is as the National Assembly has already formed teams of members that will work most closely on the individual portions of the bill.

Both chambers of the National Assembly must have to pass the bill after deliberating on it before it can then be passed on to the president for his final signature.

The PIB which is an oil reform bill has been in the works for about 20 years, is key to the repositioning of Nigeria’s Oil and Gas Industry under its post-COVID-19 agenda as the main laws governing oil and gas exploration have not been fully updated since the 1960s due to some contentious issues like taxes, payments to local communities, terms and revenue sharing within Nigeria.

The Group Managing Director of the Nigerian National Petroleum Corporation (NNPC), had disclosed that the delay and non-passage of the bill has made international investors to start losing confidence in the country’s oil and gas industry.

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While revealing last month that the PIB will be presented to the National Assembly in the next few weeks, the Minister of State for Petroleum Resources, Timipre Sylva, also said that the executive arm will be requesting the lawmakers to specially reconvene to receive and start deliberations on the bill.

These oil reforms and regulatory certainty became more pressing this year as low oil prices and a shift towards renewable energy made competition for investment from oil majors tougher.

The draft copy of the bill which was prepared by the Petroleum Ministry is a product of series of consultation between the federal government, oil and gas companies and other industry stakeholders.

Excerpts from the bill reported by Reuters include provisions that would streamline and reduce some oil and gas royalties, increase the amount of money companies pay to local communities and for environmental clean-ups alter the dispute resolution process between companies and the government.

It also included measures to push companies to develop gas discoveries and a framework for gas tariffs and delivery. Commercializing gas, particularly for use in local power generation, is a core government priority.

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Business

UK-based group to investment $245 million in 100 Nigerian businesses

A UK based organization is to partner local investment funds to disburse $245 million to 100 Nigerian businesses.

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UK based organization partner local investment funds to disburse $245 million to 100 Nigerian businesses

A UK-based development finance institution, CDC Group, has finalized plans to invest US$425 million as an aid to 100 businesses and 38,000 jobs in Nigeria.

This is sequel to its partnership with 40 investment funds such as Afreximbank, African Capital Alliance and Indoram, NAN reports

In a virtual visit to the country by the board of the organization led by Chief Executive, Nick O’Donohoe and Chairman, Graham Wrigley, the UK Government-funded organization stated that all earnings from its investments are ploughed back to improve the lives of millions of people in Africa and South Asia.

CDC Group noted that it paid a virtual visit to the Vice President of Nigeria, Prof. Yemi Osinbajo, and British High Commissioner to Nigeria, Catriona Laing, to discuss and ascertain the impact of CDC’s aid to its investees through the COVID-19 crisis and understand how to stimulate recovery and growth.

The discussions also focused on CDC’s own response to the pandemic through its preserved, strengthen and rebuild programme, the statement said

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(READ MORE: WHO to secure initial COVID-19 vaccine for 20% of Africans)

Commenting on the rationale of the aid, the Chief Executive of the CDC Group, Nick O’Donohe said that, “Nigeria plays a key part in our strategy of partnership and investment for economic growth in West Africa. “Hosting our 2020 board trip– albeit virtually – in both markets is a testament to our commitment.

“Looking forward, we will continue to prioritise the post-COVID-19 recovery as part of the Build Back Better agenda.

“We are committed to supporting a deeper and more strategic bilateral partnership between the UK and Nigeria that is based on enhancing economic development, job creation, inclusion, trade and investment,” O’Donohoe further remarked.

In a glowing tribute and commendation to the group, British High Commissioner to Nigeria, Catriona Laing CBE said CDC has been pivotal to creating jobs and supporting the growth of businesses by investing in the poorest countries across Africa, including Nigeria.

“CDC’s commitment to the country signals to other UK investors that investing in Nigeria is possible and should be prioritized in order to help Nigeria and indeed, Africa, mitigate the impact of COVID-19,” the envoy said.

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