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Funds Management

Global pension assets rose to $32 trillion in 2019

Though Nigeria is not on the OECD list, pension asset value in Nigeria grew by 18.3%.

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Global Pension Assets Rose to $32 trillion in 2019

According to information and data from the Organization for Economic Co-operation and Development, OECD, pension fund assets rose to $32 trillion in OECD area and $0.7 trillion in 29 other selected (non-OECD) reporting jurisdictions in 2019. A country by country analysis shows that the United States of America has the largest amount of pension fund assets in the amount of $18.8 trillion. The US is followed by the United Kingdom with pension assets of $3.6 trillion, Australia, $1.8 trillion, the Netherlands, $1.7 trillion, Canada, $1.5 trillion, Japan, $1.4 trillion and Switzerland, $1 trillion. With that, 90% of the total OECD area pension fund assets are held in those 9 countries.

Compared to 2018, OECD area pension fund assets grew by 13.9% while it grew by 11.3% in other reporting jurisdictions. With the exception of Poland and Ukraine, all the OECD countries some increases in their pension assets. The country with the largest increase is Armenia with 58.2%, followed by Turkey’s 37.3% growth rate.

READ MORE: Nigeria’s Pension Fund Asset Value Crosses the N9 trillion Mark

Pension fund asset as a percentage of GDP, indicates that assets in 5 OECD countries exceeded the country’s GDP in 2019. These are Australia with 132% pension asset to GDP ratio, Iceland, 167.6%, the Netherlands, 191.4%, Switzerland, 141.1% and the United Kingdom, 123.3%. However, 44 out of the 66 OECD countries had pension asset to GDP ratios below 20%.

African Representation; A few African countries made it to the list of pension fund asset growth in 2019. Ghana pension fund assets grew the most in Africa by 33.4% to settle at $3.14 billion, representing just 5% of its GDP. The next African country in terms of growth is Malawi with 23.1% growth, bringing its pension asset to $1.15 billion and15% pension asset to GDP ratio. Other African countries that recorded pension asset growths of note include Angola, 13.1%, Egypt, 10%, Kenya, 13.6%, and Namibia, 2.2%. Namibia has the largest Pension assets to GDP in Africa with 75% followed by Kenya’s 13.2%. The two largest economies in Africa, Nigeria and South Africa did not make it to the list, for reasons best known to the OECD. Though Nigeria is not on the OECD list, according to data from the National Pension Commission, PenCom, pension asset value in Nigeria grew by 18.3% from $23.9 billion to $28.4 billion (translated at N360/$) representing a pension asset to GDP ratio of 26%.

READ MORE: Pension Fund Managers dump Nigerian Treasury Bills

Performance to the Rescue; Impressive Pension Fund Performance helped to buoy up global pension fund assets across the countries.  On average, 29 out of 46 countries recorded positive pension fund performance in excess of 5% with 13 of those countries recoding returns in excess of 10%. The highest return came from Lithuania with a 16.6% return, followed by Brazil’s 15.6% and the Netherland’s 13.8%. However, pension funds in Czech Republic and Poland recorded negative gains of 1.4% and 2.7% respectively. Among the African countries in the selected other jurisdictions, Egypt had the highest return of 4.8%, flowed by Malawi’s 2% return.

Brace for a poor 2020: 2020 is not expected to be a repeat of 2019 due to the effects of Covid-19.  According to the OECD, “early estimates suggest that pension fund assets will decline to $29.8 trillion by the end of Q1 2020”.  It also noted that pension investors should not panic as “Saving for retirement is for the long haul and financial losses can be recouped over the long term, unless assets are withdrawn prematurely”.

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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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Exclusives

Best performing Mutual Funds in January 2021

According to data from the SEC, 49.2% of the 118 registered funds recorded positive growth in January 2021

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Best Mutual Funds in Nigeria

Mutual funds are one of the fastest-growing asset classes in Nigeria, as data from the Security and Exchange Commission (SEC), shows that 49.2% of the 118 registered funds recorded positive growth in January 2021.

A mutual fund is a type of financial vehicle made up of a pool of money collected from various investors, with the aim of investing them in securities like stocks, bonds, money market instruments, and other assets.

According to SEC, a total of 118 mutual funds were registered as of January 29, 2021, with a net asset value of N1.57 trillion across several fund types.

Nairametrics tracked the performance of these mutual funds by comparing the fund prices as of 31st December, 2020 with the fund prices as of the last trading day of January 2021.

Below were the top-performing mutual funds in the month of January 2021. We also highlighted their performance in terms of changes in net asset value and included profiles of the funds as described on their websites.

READ: Investors pump N7 billions into New Gold ETF


Lotus Capital Halal ETF – Lotus Capital Limited (Exchange Traded Fund)

The Lotus Halal Equity Exchange Traded Fund “LHE ETF” is an open-ended fund that tracks the performance of the NSE-Lotus Islamic Index (NSELII). It is designed to enable investors obtain market exposure to the securities of the constituent companies of the NSE-Lotus Islamic Index and to replicate the price and yield performance of the index.

December 31st, 2020

Fund Price – N12.73

January 29th, 2021

Fund Price – N13.66

Return – 7.31%

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Ranking – Fifth

Binance

Commentary: This is an Exchange Traded Fund by Lotus Capital Limited, which grew by 7.31% in the month of January. The fund also grew significantly by 51.7% in the year 2020, indicating that the fund is a delight to its investors. Also, the net asset value stood at N655.04 million as of 29th January, 2021, indicating 6.76% growth compared to N613.59 million recorded as of 31st December, 2020.

READ: Understanding how Mutual Funds and ETFs work in Nigeria

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Stanbic IBTC Aggressive Fund – Stanbic IBTC Asset Mgt. Limited (Equity Based Funds)

The Stanbic IBTC Aggressive Fund (SIAF), which was launched in June 2012, is an open-ended fund that invests a minimum of 60% of its portfolio in equities of companies listed on the Nigerian Stock Exchange (NSE) and a maximum of 40% in fixed income securities. Notably, the expense ratio for the fund is 1.5%.

December 31st, 2020

Fund Price – N2,525.55

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January 29th, 2021

Fund Price – N2,713.93

Return – 7.46%

Ranking – Fourth

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Commentary: Stanbic IBTC Aggressive Fund is the second-best performing Equity-Based fund in the month of January, growing by 7.46% to stand at N2,713.93 as of 29th of January, 2021. The net asset value also grew by 7.43% to close at N340.8 million.

READ: DV Balanced Fund to become a Money Market Fund


FSDH Dollar Fund – FSDH Asset Management Ltd. (Fixed Income Funds)

This is an open-ended mutual fund that invests in US Dollar denominated Fixed Income Securities issued by Nigerian Sovereign and Corporate Entities. The objective of the fund is to provide customers with the opportunity to invest in dollar-denominated instruments. Meanwhile, the minimum amount required to invest in the fund is $1,000.

December 31st, 2020

Fund Price – N415.1

January 29th, 2021

Fund Price – N447.7

Return – 7.85%

Ranking – Third

Commentary: The fixed income fund managed by FSDH Asset Management, recorded growth of 7.85% in January from N415.1 recorded as of the end of 2020 to stand at N447.7 at the end of January. The net asset value grew by 18.41% to close at N1.002 billion.


Paramount Equity Fund – Chapel Hill Denham Mgt. Limited (Equity-based Fund)

Paramount Equity Fund is Nigeria’s oldest mutual fund, which invests in a broad range of high-quality equities and fixed income securities. The fund aims to provide an investment vehicle that will enable unit holders to achieve consistent capital appreciation over a medium-to-long term.

December 31st, 2020

Fund Price – N16.27

January 29th, 2021

Fund Price – N17.56

Return – 7.93%

Ranking – Second

Commentary: This is an Equity Based Fund managed by Chapel Hill Denham Management, which grew by 7.93% in the month of January 2021 to stand at N17.56 as of 29th of January 2021, while the net asset value grew by 8.22% to stand at N598.19 million.


Vantage Dollar Fund – Investment One Funds Management (Fixed Income Fund)

Vantage Dollar Fund is an open-ended Unit Trust Scheme by Investment One Funds. The Fund seeks to provide investors with a bias for Dollar denominated securities an access to such securities, which ordinarily would be inaccessible to them by virtue of the minimum amount typically required to make such investments.

December 31st, 2020

Fund Price – N559.87

January 29th, 2021

Fund Price – N502.9

Return – 11.33%

Ranking – First

Commentary: This is the best performing mutual fund in the month of January 2021 and the only fund with a double-figure yield in the month under review. Vantage Dollar Fund grew by 11.33% to stand at N502.9 as of 29th of January 2021 while the net asset value also grew by 10.93%. This is quite an impressive performance as the fund primarily invests in Corporate and Sovereign Eurobonds.


 

Bubbling under……

The following funds make up the rest of the top 10 our list in ascending order:

AXA Mansard Equity Income Fund – AXA Mansard Investments Limited (Equity Based Fund)

Return – 6.69%

VETBANK ETF – Vetiva Fund Managers Limited (Exchange Traded Fund)

Return – 6.82%

PACAM Equity Fund – PAC Asset Management Limited (Equity Based Fund)

Return – 6.86%

Legacy Equity Fund – First City Asset Management (Equity Based Fund)

Return – 7.14%

VCG ETF – Vetiva Fund Managers Limited (Exchange Traded Fund)

Return – 7.16%

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Exclusives

Best performing Mutual Funds in 2020

According to data from the Security and Exchange Commission (SEC), 54.3% of the 116 registered funds recorded positive growth in 2020.

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Mutual Funds are a great form of investing especially for passive investors. They are designed to pool funds from various investors with the sole purpose of investing them in a portfolio of investments (shares, bonds, treasury bills etc).

The year 2020 was ravaged by the covid-19 outbreak in Nigeria, causing a decline in most economic activities. However, major mutual funds in Nigeria recorded double-figure growth in year, a reason for investors to smile despite the pandemic.

According to data from the Security and Exchange Commission (SEC), 54.3% of the registered funds recorded positive growth in the year, 37.1% remained unchanged while only 10 (15.9%) funds recorded negative growth in the period.

READ: Pension fund administrators pile up cash in anticipation of withdrawals

As of 31st December 2020, the Security and Exchange Commission (SEC) registered a total of 116 mutual funds with over N1.57 trillion net asset value cutting across several fund types.

Below is a breakdown of the fund types available to investors.

To determine the best performing Funds in 2020, we compared the Fund Prices as of 27th December 2019 with the Fund Prices as of the last day of December 2020 (31st December).

These were the top 5 performing mutual funds in 2020. We also highlighted their performance in terms of changes in net asset value and included profiles of the Funds as described on their websites.

READ: Nigeria’s mutual fund asset value hits N1 Trillion


AIICO Balanced Fund – AIICO Capital Limited (Mixed Funds)

AIICO Balanced Fund is an actively managed open-ended Fund. The Fund invests primarily in equities, government securities, fixed deposit, fixed income securities.

December 27th, 2019

Fund Price – N2.50

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December 31st, 2020

Binance

Fund Price – N3.70

Return – 48.2%

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Ranking – Fifth

Commentary: This is a Mixed Fund by AIICO Capital Limited. The Fund grew by 48.2% in 2020. The net asset value stood at N171.60 million as of 31st December 2020, growing by 57.7% compared to N108.8 million recorded in 2019.

READ: Understanding how Mutual Funds and ETFs work in Nigeria

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Lotus Capital Halal ETF – Lotus Capital Limited (Exchange Traded Fund)

The Lotus Halal Equity Exchange Traded Fund “LHE ETF” is an open-ended fund that tracks the performance of the NSE-Lotus Islamic Index (NSELII). It is designed to enable investors obtain market exposure to the securities of the constituent companies of the NSE-Lotus Islamic Index and to replicate the price and yield performance of the index.

December 27th, 2019

Fund Price – N8.39

December 31st, 2020  

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Fund Price – N12.73

Return – 51.7%

Ranking – Fourth

Commentary: This is an Exchange Traded Fund by Lotus Capital Limited, grew by 51.7% in the review period. The net asset value also stood at N613.59 million as of 31st December 2020, growing by 51.7% compared to the 2019 NAV of N404.4 million.

READ: Investors pump N7 billions into New Gold ETF


PACAM Equity Fund – PAC Asset Management Limited (Equity-Based Fund)

PACAM Equity Fund is a pure equity fund that invests funds predominantly in a portfolio of Nigerian companies, using a rigorous research-based system.

The fund provides long-term capital preservation by investing at least 75% of the fund’s assets in a diversified portfolio of high-quality companies listed on the Nigerian Stock Exchange. In order to manage liquidity, the fund may also invest up to 23% in short-term money market instruments.

December 27th, 2019

Fund Price – N1.02

December 31st, 2020

Fund Price – N1.59

Return – 55.6%

Ranking – Third

Commentary: This is an Equity-Based Fund by PAC Asset Management Limited. The Fund grew by 55.6% in 2020. The performance is impressive considering that it is purely focused on Equity, which is a reflection of the performance recorded in the equities market of the NSE in 2020. The net asset value grew by 41.1% from N204.9 million recorded in 2019 to N289.2 million in 2020.


New Gold ETF – New Gold Managers (Exchange Traded Fund)

The NewGold Exchange Traded Fund (NewGold) is an ETF listed on the Nigerian Stock Exchange in December 2011. NewGold tracks the price of gold and offers institutional and retail investors the opportunity to invest in a listed instrument (structured as a debenture) that is fully backed by gold bullion.

The fund is managed by NewGold Managers Limited while the sponsoring broker is Vetiva Capital Management Limited.

December 27th, 2019

Fund Price – N5,220

December 31st, 2020

Fund Price – N9,100

Return – 74.3%

Ranking – Second

Commentary: Gold prices have been on the up since the Covid-19 pandemic took hold of the global economy, which has reflected on the performance recorded on the gold ETF fund. New Gold ETF grew by 74.3% in 2020 while the Net Asset Value recorded 1,621% increase to close at N13.2 billion as at 31st December 2020.

New Gold also got a major boost from investors who found dual-listed companies as a means of repatriating dollars out of the country. This is done by buying shares locally and then selling on a foreign stock exchange so as to get their money out.


VI ETF – Vetiva Fund Managers Limited (Exchange Traded Funds)

The Vetiva Industrial ETF “VETIND ETF” is an open-ended Exchange Traded Fund managed by Vetiva Fund Managers Limited. The VETIND ETF is designed to track the performance of the constituent companies of the NSE Industrial Index and replicate the price and yield performance of the Index.

The NSE Industrial Index comprises the top 10 companies in the Industrial sector listed on the Nigerian Stock Exchange (NSE), in terms of market capitalization and liquidity and is a price index weighted by adjusted market capitalization.

December 27th, 2019

Fund Price – N10.49

December 31st, 2020

Fund Price – N20.52

Return – 95.6%

Ranking – First

Commentary: VI ETF is the first Fund on the list of best performing Mutual Funds in 2020. The fund price grew by 95.6% in the year under review. The net asset value also grew by 138.1% to close at N216 million as of 31st December 2020.


Bubbling under…

The following Funds make up the rest of the top 10 on our list in ascending order;

Lead Balanced Fund – Lead Asset Management Limited (Mixed Funds)
Return – 34.4%

Legacy Equity Fund – First City Asset Management Limited (Equity-Based Funds)
Return – 36.3%.

Stanbic IBTC Nigerian Equity – Stanbic IBTC Asset Management Limited (Equity-Based Fund)
Return – 36.6%.

VG 30 ETF – Vetiva Fund Managers Limited (Exchange Traded Fund)
Return – 38.6%.

Stanbic IBTC lmaan Fund – Stanbic IBTC Asset Management Limited (Ethical Fund)
Return – 41.9%.

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