The dynamics of Nigeria’s mutual funds industry keeps changing. Changes are being noticed in the size of the total asset value, as well as in the number of funds and fund managers. Another area that has witnessed some significant changes is the ranking of fund managers by asset value. Here is how they rank:
Stanbic IBTC Asset Management Limited
It retains its position as the largest mutual fund manager by asset, a position it has held since 2000.
- Stanbic IBTC Asset Management Limited manages 14 mutual funds with total asset under management of N649 billion, as at October 30th 2020. This represents 41.04% of Nigeria’s total mutual fund asset under management.
- Stanbic IBTC money market fund is the largest single mutual fund in Nigeria.
- With about N330.8 billion in AUM, Stanbic IBTC Money Market Fund accounts for 20.9% of Nigeria’s total mutual fund asset value as at October 30th 2020.
FBN Capital Asset Management Limited
FBN Capital Asset Management Limited is the second largest asset management company in Nigeria.
- It currently oversees 17.21% of total mutual fund assets, which translates to an AUM of N272.2 billion.
- FBN Capital Asset Management Limited has 7 mutual funds under its management.
- Its money market fund, FBN Money Market Fund, with asset under management of N242 billion, is the second largest single mutual fund in Nigeria.
- With that much asset value, FBN Money Market Fund houses 15.3% of Nigeria’s total mutual fund assets as at October 30th 2020.
UBA Asset Management Company
UBA Asset Management Company is the 3rd largest asset manager in Nigeria, having overtaken Asset Resources Management (ARM) Limited.
- UBA Asset Management Company now manages 9.5% of Nigeria’s total mutual fund assets with an asset under management of N150.2 billion.
- UBA Asset Management Company manages 6 mutual funds, the largest of which is UBA Bond Fund with asset value of N106.7 billion as at October 30, 2020.
- UBA Bond Fund is however, the 5th largest single mutual fund in Nigeria.
Asset and Resources Management Limited
Asset and Resources Management Limited comes 4th in the ranking of fund managers by asset size.
- Prior to this period, the fund manager occupied the 3rd position until it got pushed over by UBA Asset Management Company.
- Asset and Resources Management Limited currently manages 6.72% or N106.3 billion of Nigeria’s N1.58 trillion mutual fund industry.
- It has 6 funds under its belt with ARM Money Market Fund’s N93 billion in asset value as the largest.
- ARM Money Market Fund is the 6th single largest mutual fund in Nigeria.
Chapel Hill Denham Management Limited
Chapel Hill Denham Management Limited made a giant leap from its previous 7th position to become the 5th largest asset manger in Nigeria.
- As at October 30th, 2020, its asset under management stood at N61.9 billion.
- Chapel Hill Denham Management Limited manages 4 mutual funds, with Chapel Hill Denham Nigeria Infrastructure Debt fund as the largest.
- With asset under management of N58.6 billion, Chapel Hill Denham Nigeria Infrastructure Debt fund is the 7th largest single mutual fund in Nigeria.
The good news about Nigeria’s mutual fund industry is that the fund managers are always “fighting” for positions by growing their assets month over month. For example, FSDH and AXA Mansard have now been relegated to the 6th and 9th positions respectively – from 4th and 5th positions previously. First City Asset Management Limited and Quantum Zenith Asset Management and Investment Limited also moved to new positions.
Below is the current ranking of mutual fund managers by asset value in Nigeria.
Too Big to Fail
The industry seems to be sitting on the too big to fail risk as 41.04% of the total mutual fund assets in Nigeria is being managed by Stanbic IBTC Asset Management limited, while Stanbic IBTC Money market Fund and FBN Money Market Fund (the first 2 largest single funds) account for 36.2% of Nigeria’s total mutual fund assets.
Too big to fail is a concept that a financial institution is so important to the economy that the authorities must ensure that such an organization does not go bankrupt or cease to continue its business as a going concern. This is because when and if that happens, the effect on the economy or investors could be devastating. The position of Stanbic IBTC Asset Management Limited in the Nigerian mutual fund industry, where it manages approximately N0.65 trillion out of the N1.58 trillion mutual funds asset, calls for a close watch by the regulatory authorities.
Nigeria’s pension asset dips N51.3 billion in February 2021
Nigeria’s pension asset fell to its lowest position in four months, lost N51.3 billion in February 2021
Nigeria’s total pension assets lost a total of N51.3 billion to stand at N12.25 trillion in the month of February 2021. This is according to the monthly pension report released by the Nigerian Pension Commission.
According to data compiled by Nairametrics Research, Nigeria’s pension assets fell to their lowest position in four months, characterized by the decline in bond prices, and profit-taking activities in the Nigerian equity market.
- The total pension asset declined by 0.42% from N12.29 trillion recorded as of January 2021 to N12.25 trillion in February 2021.
- Federal Government bonds stood at N7.34 trillion, accounting for 59.6% of the total pension asset under management.
- Also, local money market securities, which stood at N1.62 trillion as of February 2021, accounted for 13.4% of the gross asset for the period under review.
- Mutual funds recorded a decline of 1.3% to stand at N158.96 billion from N162.1 billion recorded in the previous month.
- However, treasury bills increased by 5.5% from N670.34 billion recorded as of the last day of January 2021 to N676.91 billion at the end of February 2021.
A cursory look at the data revealed that the pension asset had reduced by N6.93 billion in the previous month, before losing N51.28 billion in the period under review.
As of February 2021, RSA Fund II accounted for 43.82% of the total pension asset, as it stood at N5.37 trillion, followed by Fund III with N3.16 trillion (25.79%), and CPFAs at N1.47 trillion (11.98%).
Why the decline?
While responding to questions regarding the recent decline in pension fund assets, Oguche Agudah, the CEO of Pension Fund Operators Association of Nigeria (PenOp), stated that it was due to the decline in prices of fixed securities.
- He, however, called on pension contributors to increase their contributions as that would guaranty more funds. He also called on employers in the private and government sector to remit due pension contributions.
- Commenting on the reasons for the loss, Mrs Amaka Andy-Azike, the head of branding and communication of PenOp, stated that the losses are however unrealized losses and would have recovered in the month of March as the yield of government securities continues to trend upward.
- She, therefore, called on pension contributors to be calm as there was no cause for worry. Mrs Amaka also reiterated that the pension scheme prioritises secured investments rather than riskier instruments that could yield higher returns.
- Nairametrics had reported that Nigerian Pension Fund Administrators across the different fund types, dipped significantly in the month of February 2021 as only 22% of the funds recorded positive growth in the month.
Nigeria’s Best performing Mutual Funds in Q1 2021
The Net Asset Value of the listed Nigerian Mutual Funds dipped by 4.01% in Q1 2021
Mutual Funds in Nigeria recorded a bearish performance in the first quarter of 2021 as only 25 funds posted positive growth in the review month against 59 declines while 34 funds remained flat in March.
Mutual funds have been considered as a good alternative investment opportunity, particularly for retail investors because it gives them access to diversified and professionally managed portfolios at a low price.
However, data obtained from the Security and Exchange Commission revealed that on average, the 118 listed funds as of 31st March 2021, dipped by 1.91%, having recorded a similar decline in the month of February.
- Also, the net asset value declined by 4.01% from N1.57 trillion as of 31st December 2020 to N1.51 trillion as of 1st April 2021.
- This is could be partly attributed to the bearish performance recorded in the Nigerian Stock Exchange market as data from the NSE showed that the All-Share Index dipped by 3.63% year to date as of April 1, 2021.
- A comparison of the performance of the fund types indicated that despite the fall in total net asset value in Q1 2021, Bond funds grew by +14.82%, Ethical funds by +12.95%, Fixed income funds by +12.91%.
- Real estate funds and infrastructure funds grew marginally by +0.69% and +0.43% respectively. Other funds recorded losses with the money market funds recording the highest loss of -20.68%.
Nairametrics tracked the performance of these mutual funds by comparing the fund prices as of 31st December 2020 with the fund prices as of 1st of April 2021.
Below were the top-performing mutual funds in Q1 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.
ARM Ethical Fund – Asset & Resources Mgt. Company Ltd. (Ethical Funds)
The ARM Ethical Fund is suitable for Islamic investors who want long-term capital growth by investing strictly according to the principles of Islamic finance and ethical values. The Fund invests only in investments screened by a Shari’ah Advisory Board.
It invests in equities, real estates, and other investments that do not involve interest-bearing transactions.
December 31st, 2020
Fund Price – N35.46
April 1st, 2021
Fund Price – N36.55
Return – 3.06%
Ranking – Fifth
Commentary: The ARM Ethical Fund was the fifth-best performing fund in the first quarter of the year. The unit price appreciated by 3.06% while the net assets value increased by 3.15% from N358.96 million as of 31st December 2020 to N370.27 million as of 1st April 2021.
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 and 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 – N502.90
April 1st, 2021
Fund Price – N518.95
Return – 3.19%
Ranking – Fourth
Commentary: The Ventage Dollar fund performed as the fourth-best performing fund in the first quarter of the year. The unit price appreciated by 3.19% while the net assets value declined by -2.97% from N1.85 billion as of December 31st, 2020 to N1.79 billion as of April 1st 2021.
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.
The minimum amount required to invest in the fund is $1,000.
December 31st, 2020
Fund Price – N415.10
April 1st, 2021
Fund Price – N431.44
Return – 3.94%
Ranking – Third
Commentary: The FSDH Dollar Fund was the third best performing fund in the first quarter of the year. The unit price appreciated by 3.94% while the net assets value increased by 41.99% from N846.27 million as of December 31st, 2020 to N1.2 billion as of April 1st 2021.
FBNQuest Asset Management Limited – Institutional (Bond Funds)
The FBN Nigeria Eurobond (USD) designed for institutional investors is also invested in US Dollar-denominated debt instruments issued by the Nigerian government and reputable corporate institutions and managed by FBNQuest Asset Management Limited.
To begin investment as an institutional investor, a minimum of $100,000 is required for a minimum tenor of 180 days.
December 31st, 2020
Fund Price – N49,283.56
April 1st, 2021
Fund Price – N51,682.31
Return – 4.86%
Ranking – Second
Commentary: The FBNQuest Asset Management Limited bond funds created for institutional investors was the second best performing fund in the first quarter of the year. The unit price appreciated by 4.86% while the net assets value increased by 5.69% from N571.01 million as of December 31st, 2020 to N603.51 million as of April 1st 2021.
FBNQuest Asset Management Limited – Retail (Bond Funds)
The FBN Nigeria Eurobond is a fixed income mutual fund that invests in the US Dollar-denominated debt instruments issued by the Nigerian government and reputable corporate institutions. Investments can be made into this fund by both retail and institutional investors.
To get started as a retail investor, a minimum investment of $2,500 is required and the minimum holding period is 180 days.
December 31st, 2020
Fund Price – N49,346.65
April 1st, 2021
Fund Price – N51,751.89
Return – 4.87%
Ranking – First
Commentary: The FBNQuest Asset Management Limited bond funds created for retail investors was the First best performing fund in the first quarter of the year. The unit price appreciated by 4.87% while the net assets value increased by 18.29% from N4.57 billion as of December 31st, 2020 to N5.41 billion as of April 1st 2021.
- Legacy Equity Fund – 1.95%
- PACAM Equity Fund – 1.81%
- Stanbic IBTC Shariah Fixed Income Fund – 1.66%
- AVA GAM Fixed income Dollar Fund – 1.65%
- United Capital Fixed – 1.51%
Nairametrics | Company Earnings
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- 2021 Q1 Results: FTN Cocoa Processor Plc reports loss after tax of N162.21 million
- Tantalizers Plc reports a loss after tax of N97.75 million in FY 2020 in Q1 2021.
- Courteville Business Solutions Plc proposes final dividend of 3 kobo per share for FY 2020.
- 2020 FY Results: UPDC Real Estate Investment Trust records over 500% growth in Profit after tax.
- Sovereign Trust Insurance records a 43% surge in profit after tax to N392.1 million in Q1 2021.