As stock-taking and post mortem analysis of 2019 continues, analysts at Quantitative Financial Analysis have gone through their analysis tools to filter Nigerian mutual funds according to their performances in 2019. In one of my articles on why you should measure the performance of your portfolio of investment, I gave some convincing reasons for doing just that.
If you do not know where you are, in relation to your investment, you may not know if the strategy you are following will lead you to the promised land of investment goals. So, knowing the performance of your investment helps you know when to engage in any form of strategy shift or portfolio rebalancing.
Knowing how good or bad your mutual fund is doing in comparison with its peers, (peer comparison), helps you to know if you should continue with your current investment manager if you need to try another one, or even diversify across managers. The performance of your portfolio helps you know whether your asset selection is good enough in helping you achieve your financial goals.
Unfortunately, one bad part of knowing the performance of your fund is that it can make you sad, especially if you are losing money. With that summary of the need to know how your fund is doing, it may be imperative to warn you upfront that past performance is not a guarantee of future performance. This analysis is made on a compilation of fund data released by the Securities and Exchange Commission (SEC).
New Gold ETF leads the pack: In 2019, New Gold Etf took the lead as the best performing fund with a return of 161%, having ended the year at a unit price of N5,220 from previous year end close of N2,000. New Gold ETF is about the most volatile fund in Nigeria, and its risk-reward ratio is 19.33 to 16.55.
Vetiva Sovereign Bond ETF blazed the trail as the second best performing fund after recording a performance of 26.39%, by ending the year at unit price of N202.44 from its previous year-end close of N159.85. The fund, which benefits from positive price changes and exchange rate volatility, has a risk-reward ratio of 2.74 to 7.52.
United Capital Euro Bond Fund recorded a performance of 23.83% to take the third position of best fund performers. Again, benefiting from the volatility in the local currency, the fund rose from a previous year-end close of N32,904.26 to end 2019 at N40,746.82. On the risk-reward spectrum, the fund stands at 2.52 to 6.79.
Does size affect performance? In many endeavours in life, the question of whether size affects performance always rears its ugly head at one time or the other. In the mutual fund arena, that question often comes to investors’ minds when looking at funds to invest in.
Though the effect of size on performance is a topic I would like to write in more detail about, suffice it to say here that only one of the many funds being managed by the largest asset management company in Nigeria, the Stanbic IBTC Asset Management company, made it to the list of high performers in 2019.
Even at that, its flagship fund, the Stanbic IBTC Absolute fund, ended up at the ninth position out of the ten best performing funds. That begs the question, does size matter? Be that as it may, below is the list of the 10 best performing mutual funds in 2019.
Best Performing Fund
- Name of Fund: New Gold ETF
- YTD Performance %: 161%
- YTD Gain per unit: N3,220
Second Best Performing Fund
- Name of Fund: Afrinvest Equity Fund
- YTD Performance %: 47.62%
- YTD Gain per unit: N47.62
Second Best Performing Fund
- Name of Fund: Vetiva S&P Nigeria Sovereign Bond Fund
- YTD Performance %: 26.39%
- YTD Gain per unit: N42.19
Third Best Performing Fund
- Name of Fund: United Capital Euro Bond Fund
- YTD Performance %: 23.83%
- YTD Gain per unit: N7,842.56
Fourth Best Performing Fund
- Name of Fund: ACAP Income Fund
- YTD Performance %: 22.34%
- YTD Gain per unit: N0.14
Fifth Best Performing Fund
- Name of Fund: Coronation Fixed Fund
- YTD Performance %: 15.73%
- YTD Gain per unit: N0.18
Sixth Best Performing Fund
- Name of Fund: Nigeria International Debt Fund
- YTD Performance %: 14.77%
- YTD Gain per unit: N40.37
Seven Best Performing Fund
- Name of Fund: Kedari Investment Fund
- YTD Performance %: 14.68%
- YTD Gain per unit: N18.37
Eight Best Performing Fund
- Name of Fund: Stanbic IBTC Absolute Fund
- YTD Performance %: 13.88%
- YTD Gain per unit: N453
Nine Best Performing Fund
- Name of Fund: Legacy Short Maturity Fund
- YTD Performance %: 12.65%
- YTD Gain per unit: N0.41