Stanbic IBTC Pension Managers, Veritas Glanvills Pensions Ltd and ARM Pension Managers rank among top-performing Pension Fund Administrators for the first 9 months of 2021. This is according to data compiled by Nairalytics, the research arm of Nairametrics.
As part of our periodic series ranking top-performing pension funds based on the rate of returns posted, this latest review looks at the performance of all PFAs over the first 9 months of the year.
The year 2021 has been a challenging year for fund managers and investors with yields on equities and fixed income securities falling below inflation rate. See ranking of best PFAs in Q3 2021 and best performing PFAs in 2020.
What is the data saying?
According to July 2021 data from Pencom, Pension Fund Administrators keep over 81% of their Net Asset Values in fixed income securities, particularly FGN bonds (64.5%) most of which earn single-digit returns. Only 6.7% of their investments are held on local equities. The low yield environment has expectedly impacted returns across the industry leaving pension fund contributors with returns that are wat below the inflation rate.
According to the analysis carried out for the period under review, Stanbic IBTC Pension Managers Limited, Veritas Glanvills Pensions Limited and ARM Pension Managers Limited were the best performing funds with an average year to date growth of 6.79%, 6.29% and 6.02% respectively.
Critics of the current pension fund regulation often point to a large focus on conservative investment as PFAs have little incentive to take on more calculated risk, in exchange for higher returns. To address this, PENCOM has introduced measures such as “transfer window” (allowing contributors to move from one pension fund to another) and created more funds categories that target various levels of risk and risk appetite for investors. The result is a more competitive market that is still in its infancy.
A closer look at the data shows that the RSA Fund IV was the top-performing fund for the period under review with a record of 4.91% return on investment followed by the RSA fund III with a record of 4.41% returns on investment.
The list below includes the top 3 best performers between January and September 2021 for each of the Fund Categories approved by Pencom.
Overall Best-Performing PFAs Year-to-date
The three best-performing pension fund administrators in the 9-month period between January and September 2021, having averaged their performance for the four categories of funds, are given below:
Third Position: ARM Pension Managers Limited
Year to date returns – 6.02%
Second Position: Veritas Glanvills Pensions Limited
Year to date returns – 6.29%
First Position: Stanbic IBTC Pension Managers Limited
Year to date returns – 6.79%
Best PFAs by Fund Category
For the period under review, the RSA IV was the best performing fund category given its average growth rate of 4.91%. However, below are the best performing PFAs in their various fund categories.
RSA Fund I
This fund is designed for active contributors who are 49 years of age and below. It is majorly for the sake of maximizing the returns on investment through diversifying 20% to 75% of the funds in income instruments. Contributors can shift from this fund to fund II or III once they attain 50 years of age.
Third Position: ARM Pension Managers Limited
Year to date returns – 5.46%
Second Position: APT Pension Fund Managers Limited
Year to date returns – 7.22%
First Position: Stanbic IBTC Pension Managers Limited
Year to date returns – 8.28%
Others on the list include Veritas Glanvills Pensions Limited (4.69%), Nigeria Police Force Pensions Limited (4.59%) and Pensions Alliance Limited (4.52%).
RSA Fund II
The RSA II fund is a balanced find with the intention of preserving capital while pursuing fair returns in the long term. About 10% to 55% can be invested in variable income instruments. It is a default fund for contributors who are 49 years and below and active contributors can shift to fund I based on their request to do so.
Third Position: Sigma Pensions Limited
Year to date – 6.65%
Second Position: Tangerine Pensions
Year to date – 6.7%
First Position: APT Pension Fund Managers
Year to date returns – 7.48%
Others on the list include Veritas Glanvills Pensions Limited (6.64%), ARM Pension Managers Limited (6.45%), Stanbic IBTC Pension Managers Limited (6.25%) and Trustfund Pensions Plc (5.95%).
RSA Fund III
This fund has its focus on capital preservation. It is a conservative fund with about 5% to 20% invested in variable income instruments. It is a fund for contributors who are 50 years and above. However, upon request, the contributors can shift to Fund II.
Third Position: Stanbic IBTC Pension Managers Limited
Year to date – 6.17%
Second Position: ARM Pension Managers Limited
Year to date returns – 6.4%
First Position: Veritas Glanvills Pensions Limited
Year to date – 6.67%
Others on this list include First Guarantee Pension Limited (6.15%), Sigma Pensions Limited (5.97%), Trustfund Pensions Plc (5.94%) and Pensions Alliance Limited (5.90%).
RSA Fund IV
This fund category is only open to retirees and mostly conservatives. Contributors in this fund cannot move from this fund to any other fund. About 10% of the fund can be invested in variable income instruments.
Third Position: Veritas Glanvills Pensions Limited
Year to date – 7.15%
Second Position: Sigma Pensions Limited
Year to date return – 7.21%
First Position: First Guarantee Pension Limited
Year to date returns – 7.39%
Others on this list include Stanbic IBTC Pension Managers Limited (6.45%), Leadway Pensure PFA Limited (6.22%), Tangerine Pensions (6.19%) and Pensions Alliance Limited (6.03%).
How we determine top performers
- The percentage difference between the bid price on the last day of the period under review and the bid price on the last day of the prior year provides us with our YTD returns.
- This is done across all fund categories where prices are published.
- Bid prices and other associated data is obtained from the websites of all Pension Funds provided that they are published on their website on the day it was captured.
- For this ranking, we obtained information from the website all PFAs except Crusader Sterling Pension, Investment One and NLPC Pension Fund who were yet to update their websites with the requisite data.
- All efforts to obtain the data from the three PFA failed as of press time.
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Nice. Too bad that there is a limit to their investment choices, hence performance is way below inflation.
Would you be nice enough to work on say a 5yr performance comparison on the PFAs, so we can see who has been consistently delivering.