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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).

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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

December 31st, 2020

Fund Price – N3.70

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Return – 48.2%

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


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%.

Nairametrics Research team tracks, collates, maintains and manages a rich database of macro-economic and micro-economic data from Nigeria and Africa. Our analysts share some of the data collated on Nairametrics, using formats such as docs, tables and charts etc. The team also publishes research based analysis as articles on a regular basis.

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Exclusives

Corporate Nigeria spends N31.22 billion on travel expenses in 2020

According to data obtained by Nairametrics Research, travel expenses of major corporations in Nigeria dipped by 36.97% in 2020.

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Corporate Nigeria represented by the largest listed companies on the Nigerian Stock Exchange experienced a reduction in business travel expenses in the year 2020.

According to data obtained from the audited financial statements of the top 30 companies listed on the Nigerian Stock Exchange (NSE) known as the NSE-30 and verified by Nairametrics Research, travel expenses dipped by 36.97% from N49.54 billion recorded in 2019 to N31.22 billion in 2020.

Travel expenses include flight tickers, hotel expenses, cost of renting and maintaining private jets, local interstate and intrastate transportation etc.

  • Of the 30 companies considered, only 3 of them increased their travel expenses in 2020. Notably, Guinness increased its travel expenses by 283.1% from N261.4 million to N1 billion in the review period.
  • Nascon Allied Industries and Presco Plc incurred a sum of N91.8 million and N2.02 billion in travel expenses, representing a 125.2% and 33.7% increase respectively.
  • On the other hand, MTN Nigeria recorded the highest decline in travel expenses, reduced by 79.9% to stand at N964 million as against N4.79 billion recorded in 2019. Stanbic IBTC followed with a decline of 60.95% to stand at N676 million.
  • It is worth noting, that some companies were not included in this study as they did not disclose their travel expenses during the period under review.

READ: Banks earn N216 billion in E-banking income amidst threat from challenger banks

Why the drop?

The drop in travel expenses was expected as the entire private sector experienced a lockdown for most parts of the year due to Covid-19. The Federal Government introduced movement restrictions on land, sea, and air commute in response to the spread of the Covid-19 virus.

  • This resulted in the cancellation of business travel expenses across the commercial and political nerve centres of the country. Bearing the brunt of this cut in expenses were airlines, hotels, and the entire travel industry who suffered massive revenue losses.
  • The travel industry has been one of the worst-hit sectors due to the COVID-19 outbreak with lockdowns, travel bans, restrictions, and quarantines, which have had a severe impact on business travel for corporate entities in Nigeria.
  • High travel cost implications, hotel rates, and reduction of airline services also made companies resort to phasing out in-person meetings and business travel, as it is more affordable and productive to go digital.
  • The deployment of technology has helped companies cut their travel expenses since part of the key reasons for business travel is for conferences, meeting suppliers and customers. Going forward, video calls show strong potential to replace in-person meetings, resulting in fewer business travels.
  • Additionally, business travels that are meant for training and other learning activities can be done through e-learning.
  • The consistency of corporate entities in adopting technology by going digital will likely continue to reduce business travel expenses of corporations in the country.

READ: Nigerian corporates spend N1 trillion on capital investment in 2020

Gains and losses

On the flip side, online virtual work from home tools such as Microsoft Teams and Zoom recorded massive revenue boost as the private sector and even government relied on them to connect with clients, employees and other stakeholders.

  • Unfortunately, Nigerian businesses, particularly the tech sector failed to take advantage of the travails of the hospitality sector losing much of this revenue to the likes of Microsoft, Google, Netflix, and Zoom. Nevertheless, other Nigerian tech companies, especially in the entertainment, payment, savings and loans space all recorded a significant boost in topline revenues.

The top 5 spenders

The increase or drop in travel expenses for some of the companies under review suggests the approach management took in response to the Covid-19 lockdown. While some reacted by going completely remote as indicative of their numbers, others continued spending, perhaps due to an inefficient cost structure that could not be scaled down despite the imposed lockdown.

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Access Bank (N7.15 billion)

Access Bank Plc spent a total of N7.15 billion on business travel expenses in 2020, representing a reduction of 31.9% compared to N10.5 billion recorded in the previous year.

  • The tier-1 bank accounted for 22.9% of the total travel expenses incurred by the top 30 companies on the NSE.
  • The bank’s total asset as of December 2020, stood at N8.67 trillion, representing the highest on the NSE.

UBA (N4.94 billion)

United Bank for Africa incurred a sum of N4.94 billion on business travels in the year 2020. Its travel expenses reduced by 30.1% compared to N7.06 billion recorded in 2019.

  • Its expenses accounted for 15.8% of the total recorded by companies under consideration.
  • UBA recorded a growth of 27.7% in profit after tax from N89.1 billion recorded in 2019 to N113.8 billion in 2020.

FBN Holdings (N3.51 billion)

FBN Holdings the parent company of First Bank of Nigeria, one of the major financial institutions in the country, spent a total of N3.51 billion on travel expenses in the year under review.

  • The tier-1 bank reduced its business travel expenses by 48.24% from N6.78 billion recorded in 2019 to N3.51 billion.
  • Also, FBN Holdings accounted for 11.2% of the total business travel expense of the companies under consideration.
  • It is worth noting that FBN Holdings classified its travel expenses as passages and travels.

 

Dangote Cement (N2.11 billion)

The most capitalized company on the Nigerian Stock Exchange, valued at N3.7 trillion spent a total of N2.11 billion on business travel expenses in 2020.

  • The foremost cement manufacturer in Nigeria recorded a 13.8% decline in travel expenses from N2.45 billion recorded in 2019 to stand at N2.11 billion in 2020.

Presco Plc (N2.02 billion)

Presco Plc, a fully-integrated agro-industrial establishment specializing in the cultivation, extraction, refining, and fractionation of crude palm oil into finished products, spent a total of N2.02 billion on travel expenses in 2020.

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Its travel expenses in 2020, represent a 33.71% increase compared to N1.51 billion recorded in the previous year.

  • It also accounted for 6.5% of the total travel expenses recorded by the companies under consideration.

Bubbling under

  • Zenith Bank – N1.88 billion
  • Seplat – N1.26 billion
  • Guinness – N1 billion
  • MTN Nigeria – N964 million
  • Fidelity Bank – N964 million

Note: Fidelity Bank classified its expenses as travelling and accommodation, while MTN Nigeria as Trainings, travels and entertainment cost.

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Exclusives

New Management set to take charge at GT Bank as list of appointment and exit leaks

A major Management restructuring is at the final stages of completion at GTB, one of Nigeria’s most respected commercial banks.

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GTBank declares dividend payment for FY 2019

A major Management restructuring is at the final stages of completion at Guaranty Trust Bank, one of Nigeria’s most respected commercial banks.

Sources with knowledge of the matter informed Nairametrics that a clean sweep of top management staff above the age of 45 has been effected as current maverick MD/CEO Segun Agbaje prepares to retire as MD/CEO of the bank and proceed as MD/CEO of the bank’s Holding Company.

Segun Agbaje is expected to leave following the end of his 10-year tenure as Managing Director of the bank.

According to multiple sources, the bank is set to announce Miriam Olusanya as its new Managing Director. We understand the Central Bank has already been notified and a formal announcement could be made anytime soon.

READ: BankTech War: Segun Agbaje says GTBank not afraid of Fintech

In an internal memo dated April 28, 2021, and seen by Nairametrics, Thomas John has been appointed Managing Director of GTB West Africa while Bayo Veracruz was appointed Managing Director of GTB East Africa.

Others are Olayinka Odusote as Divisional Head, Digital Banking, an important position considering the bank’s ambition to transform into a full-fledged digital bank. Ijeoma Esemudje is appointed Divisional Head Corporate Bank Mainland & Agric.

As part of the management restructuring already in effect, two of the oldest and revered Executive Directors of the bank have already been asked to retire after illustrious years of service to the bank. Nairametrics also understands 4 General Managers out of 9 have also been asked to exit the bank paving the way for younger executives mostly under the age of 45 to take charge.

A list of appointments and exits purportedly approved by the board is already being circulated across several social media groups on WhatsApp and Telegram. Nairametrics cannot confirm the authenticity of the list and although officials at the bank did not confirm the list, they stated that a press release would soon be made to announce the appointments.

READ: GTB, Zenith, UBA lead banks with highest social media followers 

Recruitment vs Selection Process?

In September 2020, Agbaje disclosed during the bank’s investor earnings call that GTBank was already looking for its next Managing Director. According to him, five of the bank’s Executive Directors were in line for the top job and were at the concluding stages of the recruitment process.

He said:

“What we are looking for now is a Managing Director for Guaranty Trust Bank Nigeria. The process has started; we have 5 Executive Directors and so all of them are going through the process at the moment.

We are working with a consulting firm in the UK ….. at the end of this process which will end at the beginning of the fourth quarter, we will have a Managing Director for GT Bank Nigeria.”

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