The large withdrawals being witnessed by mutual funds in Nigeria has not discouraged mutual fund managers from launching new funds, a development that is essential for the continued existence and advancement of the industry. To the faint-hearted, a time when mutual funds are experiencing net outflows, month after month, may not be a good time to think of launching new funds, but that is not so for the resilient Nigerian mutual fund managers.
A look through the various Mutual fund weekly NAV Summary reports released by the Security and Exchange Commission, SEC, shows that 9 new funds have been added to the list of mutual funds in Nigeria so far in 2021.
Compared to the same time in 2020 (at the end of June 2020) only 6 new funds made it to the list, although, by the end of the year, 2020, a total of 17 new funds were added to the list. Comparatively, in 2019, only 9 new funds made it to the list for the entire year with only 4 added within the first half of the year.
The 9 funds that have been added to the list in 2021 are:
- United Capital Sukuk Fund
- Emerging Africa Balanced-Diversity Fund
- Emerging Africa Money Market Fund
- Emerging Africa Bond Fund
- Emerging Africa Eurobond Fund
- AVA GAM Fixed Income Fund
- Nigerian Real Estate Investment Trust Fund
- Norrenberger Islamic Fund
- Stanbic IBTC Enhanced Short Term Fixed Income Fund
Together, the nine funds have added about N15 billion to the total asset of Nigerian mutual funds.
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Though the funds may be new on the list and nomenclature, they do not seem to be new in their risk characteristics and asset allocation policies. The Nigerian market is almost saturated already with those generic types of mutual funds. It is, therefore, time for fund managers to become more creative and innovative with a view to launching funds that are actually new in their exposure and risk makeups. For example, it does not look like the Nigerian mutual fund industry has any fund of funds or Alternative funds yet. It is time for fund managers to look for ways to stand out in the industry by coming up with innovative products that can address the changing preferences of investors.