Nigerian pension funds asset recorded outstanding growth in the month of May 2021 as 96% of the funds under our watch recorded positive growth in the review month as against 4% which declined.
Out of the 80 funds on our watch list for the month, only three funds recorded negative growth in the review month, while the remaining 77 funds posted positive returns.
This is according to data tracked by Nairalytics Research on the fund performance released on the websites of the Nigerian Pension Fund Administrators.
The aggregate performance for the month of May for all categories of funds stood at 0.62%, while the RSA Fund IV was the best performing fund class with 0.74% returns on investment (ROI).
Nairametrics considered the prices of the different RSA funds as of 30th April 2021 and compared them with the prices as of 31st of May 2021. Also, note that Veritas Glanvills Pensions and Oak Pensions were not included in the analysis for the month, due to the unavailability of data.
Below is a list of the best-performing funds in May 2021
RSA Fund I
This fund has the highest allocation of risky or variable income instruments and participation is strictly upon a formal request from a contributor but NOT accessible to Retirees and active contributors of 50 years and above. The RSA Fund I is suitable for people who want to invest in high-risk instruments with higher rewards.
Out of the 20 funds recorded under our watch in May 2021, 19 of them recorded positive growth, which is higher than the month of April 2021 where only 12 PFAs recorded positive growth out of the 19 total funds.
First position: First Guarantee Pension Limited
- May return – 1.68%
Second position: APT Pension Fund Managers Limited
- May return – 1.32%
Third position: Nigeria Police Force Pensions Limited
- May return – 1.21%
Others on the list of PFA that recorded positive growth in their RSA Fund I include, FCMB Pensions Limited (0.96%), Stanbic IBTC Pension Managers Limited (0.71%), and Fidelity Pension Managers Limited (0.63%).
The RSA Fund I, grew by 0.57% on aggregate in the month of May 2021.
RSA Fund II
This is the default fund for RSA holders of 49 years and below. It is balanced and suitable for middle-aged contributors as well as those with a medium-risk appetite. It is designed to be less risky with reduced allocation to variable income instruments compared to Fund I.
Of the 20 funds under our watch in the month of May, all of them recorded positive growth, unlike the previous month in which just 14 out of the 19 funds recorded positive growth.
First position: IEI-Anchor Pension Managers Limited
- May return – 0.83%
Second position: FCMB Pensions Limited
- May return – 0.83%
Third position: Pensions Alliance Limited
- May return – 0.80%
Others include Nigeria Police Force Pensions Limited (0.75%), APT Pension Fund Managers Limited (0.69%), and Fidelity Pension Managers Limited (0.68%). The aggregate growth rate for the fund class stood at 0.58%.
RSA Fund III
This is the default fund for RSA holders between the ages of 50 and 60 years. It is a conservative fund that is designed for contributors close to retirement and contributors with a low-risk appetite.
Although it is suited for contributors between the ages of 50 and 60 years, younger contributors may opt to participate in this fund category.
Of the 20 funds under our watch in the review month, 18 of them recorded positive growth.
First position: Nigeria Police Force Pension Limited
- May return – 0.94%
Second position: IEI- Anchor Pension Managers Limited
- May return – 0.87%
Third position: Pensions Alliance Limited
- May return – 0.82%
Others on the list include Fidelity Pension Managers Limited (0.77%), Crusader Sterling Pensions Limited (0.72%), Radix Pension Fund Managers Limited (0.71).
The aggregate performance of the RSA Fund III stood at 0.58% in May 2021.
RSA Fund IV
The RSA Fund IV is exclusively designed for retirees and members of Funds I, II, and III are not eligible to buy into Fund IV, except upon retirement. Also, members of this fund are not allowed to move out of the fund.
The entire 20 funds under our watch for the month of May 2021 recorded positive growth.
First position: Nigeria Police Force Pension Limited
- May return – 1.02%
Second Position: Crusader Sterling Pensions Limited
- May return– 0.98%
Third position: Sigma Pensions Limited
- May return– 0.85%
Others include AIICO Pensions Managers Limited (0.84%), First Guarantee Pension Limited (0.82%), Pensions Alliance Limited (0.82%).
The aggregate performance for the month of May 2021 stood at 0.74% which makes it the best performing pension fund class for the month of May 2021.
What you should know
It is evident that Nigeria Pension Fund managers are trying their best to deliver better returns in order to encourage their contributors to stay with them.
- According to the monthly industry report, the total gross asset of the pension funds grew by N57.77 billion in April 2021 to stand at N12.39 trillion.
- A total of 28,262 new contributors also joined the scheme in April 2021.
Multi-Fund structure
The Multi-Fund structure is a framework that is aimed to align the age and risk profile of the RSA holders to one of the four distinct funds.
- RSA Fund I: It is an aggressive fund meant for active contributors that are 49 years and below. The principal purpose of the fund is to maximise returns on investment. Notably, 20% to 75% of the funds would be invested in variable income instruments.
- It is worth noting that clients are eligible to switch to Fund II or Fund III (once they attain the age of 50 years.
- RSA Fund II: It is a balanced fund with the intention of capital preservation while pursuing fair returns in the long term. It is the default funds for active contributors who are 49 years and below.
- About 10% to 55% of the pension funds can be invested in variable income instruments. Also, active contributors who are 49 years and below can switch to Fund I based on their request.
- RSA Fund III: This is more of a conservative fund, with the primary aim of capital preservation. About 5% to 20% of the funds would be invested in variable income instruments. It is the default fund for contributors who are 50 years and above.
- Active contributors can switch to Fund II based on their requests.
- RSA Fund IV: This is a fund strictly for retirees and mostly conservative. up to 10% of the fund can be invested in variable income instruments.
- Meanwhile, contributors under this fund category are not eligible to move to other fund types.