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Funds Management

Before You Transfer: Best Pension Fund managers in Nigeria (2)

Pension fund managers based on the availability of information on the website, responsiveness to inquiries, and ease of navigation of the websites, among other factors.

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NLPC, Investment One and OAK PFAs generate highest ROI in three RSA funds for 11 months, Sacked workers cash in N2.56 billion in 25% early pension withdrawal

In my last article on this, I did promise to continue the evaluation of pension fund managers with a view to providing RSA holders and investors with relevant information and data.

Here is the second part of that article.

Explore Financial Data on the Nairametrics Research Website

APT Pension Fund Administrators

This fund administrator has pricing information for the last 10 business days, meaning that if you are not a constant visitor to the site, you may miss some pricing information. Unfortunately, there is no historical price information available on the site. Pricing information for funds 1 and 3 are just getting published. Though the site publishes portfolio structure data showing what the funds invest in, there is no data on rates of return. The 2019 audited financial statement is available for download for all funds.

READ: Why African Alliance has not released its FY 2019 and Q1 2020 results

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Trust Pension Fund Administrators

This administrator seems to be the most prompt in publishing daily prices on their website, however, only the last 10 business days information is usually available. Again, this calls for frequent visitation to the site if you intend to capture the historical prices. The good part though is that the fund manager has the prices for the last day of each month on the website. Portfolio information detailing what the funds invest in is available as well as quarterly rate of returns. In addition to notifying RSA holders of the N100 flat admin fee charge, Trust Pensions has a fee chat that details management fees being charged for each fund. That is transparency in fees.

READ: NLPC and Sigma Pension Fund Administrators Take the Lead in Reporting and Transparency

NLPC Fund Administrators

NLPC reports the prices for all 5 funds for the last 7 business days. Again, this calls for frequent visits, at least weekly. Also available are the portfolio structure telling you what the funds invest in, approved rates of return, audited financial statements as well as chart of fees. The manager’s report is also available detailing each month’s performance for each fund.

READ: PZ Cussons suffers a pre-tax loss of N7.984 billion in 2020

Fidelity Pension Fund Administrators

Fidelity Pension Fund Administrators is one of the best in reporting pricing information for all 5 funds, as it has the historical data in an analysis friendly format. However, there does not seem to be information on portfolio structure, no fee information, although past audited financial statements could be found on the site.

READ: PenCom okays N2.58billion for relatives of 591 deceased workers in three months

Premium Pension Fund Administrators

Premium Pension Fund Administrators is another fund manager that publishes pricing information in a way that is amenable to analysis.  The fund manager has information about the rate of return for the funds, but without dates, it is difficult to know what period the rate of return refers to.  The only fee information available is the admin fee charge. There is also portfolio structure information detailing the asset allocation for each fund on a daily basis. Also available are past audited financial statements.

READ: PenCom discontinues Employee Death Benefit Account  

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AXA Pension Fund Administrators

Following my earlier report on transparency in reporting, AXA pension fund now reports the pricing information of its pension funds in a beautifully laid out format that allows you to define a date range for the periods you need. Besides that, not much else is available on the sight as clicks on the return’s icon, and download icon came back empty or unresponsive.

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READ: President Buhari nominates Dr. Farouk Aminu as PenCom commissioner

VG Pension Fund Administrators

VG Pension Fund reports on all 5 funds (including micro pension fund) on their website. Also, on display is the rate of returns from 2017 as well as information on administrative fee charge. You can also see the portfolio structure information on what each fund invests in and in what percentage. Each fund’s current and past audited financial statements are also available for download from the site. Though there no return information, per se, the newsletters on the site show the year-to-date (YTD) return of each fund.

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READ: Guide to Nigerian Pension Fund Contribution

Conclusion

I will be releasing a final part of this piece as it is not possible to evaluate all the PFAs in one or two articles. So, be on the lookout.

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.

1 Comment

1 Comment

  1. John U

    December 6, 2020 at 2:40 am

    Job well done. Please do better to make. Spread of the information in a tabular form. Thanks

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Funds Management

PFAs investment in FGN securities rises by 3.7% in November 2020

RSA registration marginally increased by 0.17% to 9,188,475 as at November 2020.

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NLPC, Investment One and OAK PFAs generate highest ROI in three RSA funds for 11 months, Sacked workers cash in N2.56 billion in 25% early pension withdrawal

The Pension Fund Administrators (PFAs) have increased their investments in Federal Government of Nigeria securities by 3.7% to N8.14 trillion in November 2020.

This is according to recent data from the National Pension Commission (PenCom), which revealed that the amount invested by PFAs on FGN securities including; Bonds, Treasury Bills, etc., increased from N7.85 trillion as of October 2020 to N8.14 trillion by the end of November 2020.

Key highlights

The breakdown of the amount invested on various FGN securities within the period under review are:

  • FGN Bonds got the lion’s share of N7.38 trillion as of November 2020, accounting for 90.7% of the total amount invested in FGN securities for the aforementioned month. This indicates a growth of 4.3% Month-on-Month.
  • Investment in Sukuk bond increased to N100.07 billion in November 2020, up by +6.9% Month-on-Month.
  • Investment in Treasury Bills declined to N642.03 billion, down by -1.7% Month-on-Month.
  • Investment in Agency bonds also declined to N6.03 billion, down by 50.9% Month-on-Month.
  • Investment in green bonds declined to N11.8 billion, down by 10.6% Month-on-Month.
  • Investment in state government securities stood at N150.59 billion, down by 2.5% Month-on-Month.

Read Also: Pension Fund Assets hits N9.3 trillion as investment in FGN securities drops

Upshots: The increased investment in FGN securities by PFAs within the aforementioned period might be attributable to an earlier order by CBN which prohibited PFAs from OMO Auctions. The order redirected the investment focus of most PFAs, with many opting for other low-risk FGN securities, possibly explaining why the increase occurred.

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What you should know: Nairametrics had earlier reported that CBN had restricted OMO auctions to banks and foreign investors.

  • The Net asset value of all PFAs in the country as of November 2020 stood at N12.3 trillion, marginally up by +1.98% Month-on-Month.
  • Total RSA registration for the aforementioned period also increased by 0.17% to 9,188,475.

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Debt Securities

Nigeria’s pension funds continue to divest from treasury bills

Since the beginning of 2020, pension fund managers have moved out about N1.112 trillion of treasury bills investments into mostly FGN Bonds.

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pension funds, Treasury Bill Investment: Ghana Vs Nigeria

As the low-interest regime that characterized most of 2020 continues with no immediate sign of an increase, pension fund managers have also continued to rid their portfolios of treasury bill investments.

Analysis of the recently released September 2020 edition of Pension Fund assets, by the Pension Commission of Nigeria, PenCom, shows that pension fund managers reallocated their assets away from treasury bills to FGN Bonds.

READ: Nigeria’s Micro Pension industry: A gold mine waiting to be tapped

In the month of September 2020, according to the latest report, pension fund managers closed out of treasury bill positions worth N0.224 trillion while loading up on FGN bonds worth N0.254 trillion. Since the beginning of 2020, pension fund managers have moved out about N1.112 trillion of treasury bills investments into mostly FGN Bonds.

READ: FG posts 27% revenue shortfall in 2020 as budget deficit hit N6.1 trillion

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At the beginning of 2020, total pension fund assets invested in treasury bills stood at N1.88 trillion, but that has fallen to N0.78 trillion as at the end of September 2020. Put in another way, as at the end of 2019, 18.4% of pension fund assets were invested in treasury bills but as at September 30, 2020, pension funds’ treasury bill investment stood at 6.7%

READ: Pension Fund Assets hits N9.3 trillion as investment in FGN securities drops

Implications for domestic borrowing and monetary policy

Treasury bills serve a whole lot of purposes for the government. They are used as a means for the government to borrow to cover short term budgetary deficits as well as a means for the Central Bank to manage the supply of money and its inflationary effects.

READ: Worry for PFAs as pandemic-induced unemployment lowers new pension accounts

With the increasing and seeming lack of interest by pension fund managers, who, usually are big players in the treasury bill market, the government may find it a bit problematic raising the much-needed domestic borrowing from them.

READ: Nigeria’s Eurobond yield hit 12.8% as investors flee emerging markets

In like vein, the Central Bank’s ability to implement monetary policies through treasury bills and others, open market operation, may also suffer. May be, fiscal policy may become a more potent instrument of economic management, if that happens.

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Funds Management

Nigeria’s Mutual Fund asset value grew by 50% in 2020

2020 appears to be the year with the highest growth in the value of mutual fund assets in Nigeria.

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Nine Mutual funds that joined the league of mutual funds in 2019, Nigeria’s best performing mutual funds in 2019, SEC clarifies new rules for mutual funds, sets new deadline for compliance 

While the year 2020 will go down in the annals of history as one of the worst years in the history of mankind, it was not so bad for the Nigerian mutual fund industry.

Interestingly, 2020 appears to be the year with the highest growth in the value of mutual fund assets in Nigeria.

According to data from the Security and Exchange Commission, SEC, the total value of mutual funds in Nigeria stood at N1.042 trillion as at the end of 2019. The same data source now shows that as at the end of 2020, the net asset value, NAV of Nigerian mutual fund had risen to N1.572 trillion, representing an increase of 50.79%.

READ: How to redeem your unclaimed dividends in Nigeria

A deeper analysis of the industry reveals that in 2020, mutual fund contributions amounted to about N0.903 trillion while redemptions amounted to about N0.42 trillion. The same analysis points to the fact that mutual funds gathered an estimated sum of N46.7 billion in gains.

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READ: Best Mutual Funds in Nigeria

Compared to 2019, the capital activities, comprising of subscriptions and redemptions were slightly far afield. In 2019, subscriptions stood at N0.52 trillion while redemptions came up to N0.14 trillion, resulting in a net inflow of N0.38 trillion. Net inflows for 2020 stands at N0.483 trillion. Unlike in 2019, when mutual funds made an estimated gain of N9.9 billion, the N46.7 billion made in 2020, makes Corona Virus a non-issue for the industry.

READ: Where to buy Real Estate in Lagos in 2021

Majority of the funds ended 2020 in the black, as 15, out of the 118 mutual funds on the SEC’s NAV Summary Report. The good thing about it is that no particular fund group dominated in making gains.

READ: Nigeria’s Asset to GDP Ratio Is low despite rise in Mutual Fund value

Although most of the funds that recorded huge gains came from the Euro Dollar category, Bond and Fixed income funds were not left behind as a whole lot of them stood out with mouth-watering gains. Out of nowhere, Stanbic IBTC Nigeria Equity fund sneaked in with some sizable gains too.

READ: How risky is your Mutual Fund?

On the downside, the two funds that recorded the greatest losses came from the Real Estate Investment fund category. Apparently, the Real Estate Investment Trust funds have not been doing good. Be that as it may, it is laudable that the Nigerian mutual fund industry stood out in 2020.

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