Exchange-Traded Funds (ETF) dominated the list of best performing Nigerian mutual funds in the month of November 2021, with the first three funds on the list being VG 30 ETF, New Gold ETF and SIAML ETF 40.
This is according to analysis carried out by Nairametrics Research on the weekly data obtained from the Securities and Exchange Commission (SEC).
In the period under review, 46.6% of the listed 131 funds recorded positive growth as opposed to 24.4%, that dipped in price compared to the previous month, while 29% of the listed funds closed flat. On the other hand, the net asset value of the industry reduced by N547.84 million to stand at N1.38 trillion.
According to the data from SEC, fixed-income funds recorded the highest NAV decline in the review period. Specifically, the net asset value of fixed income funds dropped by N3.26 billion between 29th October and 26th November 2021.
- Similarly, bond funds recorded a N2.23 billion decline in net asset value to stand at N211.47 billion as of November 29th, while mixed funds lost N606.96 million of its net asset value.
- On the flip side, money market funds gained the highest with N5.44 billion increase to stand at N542.55 billion.
Nairametrics tracked the performance of these mutual funds by comparing the fund prices as of 29th October 2021 with the fund prices as of 26th November 2021.
Below are the top-performing mutual funds in November 2021. We also highlighted their performance in terms of changes in net asset value and included profiles of the funds as described on their websites.
Legacy Equity Fund – First City Asset Management (Equity Fund)
Legacy Equity Fund (LEF) is an open-ended mutual fund that is benchmarked against the performance of the All-Share Index (NGXASI) of the Nigerian Exchange Limited and targeted at both retail and institutional investors.
According to the information on the company’s website, the fund seeks to outperform the return on the Index over economic cycles as well as achieving capital appreciation and generating stable income (dividends).
29th October 2021
Fund Price – N1.71
26th November 2021
Fund Price – N1.77
Return – 3.51%
Ranking – Fifth
The fund also recorded a marginal increase in its net asset value to close at N868.53 million from N852.58 million recorded as of the previous month.
ARM Discovery Balanced Fund – ARM Co. Ltd. (Mixed Fund)
ARM Discovery Balanced fund is a mixed fund managed by Asset and Resources Management Co. Ltd. According to the firm, the ARM Discovery Balanced Fund is suitable for investors who want high capital growth over the long term to meet various objectives such as paying for education, buying a property, or leaving a legacy for loved ones.
29th October 2021
Fund Price – N450.17
26th November 2021
Fund Price – N468.34
Return – 4.04%
Ranking – Fourth
A look at the net asset value shows that investors subscription in the fund reduced marginally by 0.46% to stand at N4.57 billion compared to N4.59 billion recorded as of the previous month.
SIAML ETF 40 – Stanbic IBTC Asset Mgt. Limited (ETF)
The ETF 40 aims to replicate as closely as possible, the total return of the Nigerian Exchange Group (NGX) Pension Index (i.e. an index which tracks the top 40 companies on the NGX in terms of market capitalization, liquidity and Pension Funds Administration investment eligibility).
The ETF 40 provides investors with access to a basket of liquid public-quoted companies on the NGX, whilst also achieving a net return that reflects the performance of the NGX Pension 40 Index.
29th October 2021
Fund Price – N118.21
26th November 2021
Fund Price – N130
Return – 9.97%
Ranking – Third
Stanbic IBTC’s ETF 40 gained 9.97% in the review period while it net asset value recorded a 1.88% decline to close at N835.92 million.
New Gold ETF – New Gold Managers (ETF)
The New Gold ETF which is a gold derivative that gives investors the opportunity to invest in gold without physically buying and storing the metal has made about 50% price gain since the beginning of 2020.
29th October 2021
Fund Price – N8,100
26th November 2021
Fund Price – N9,199.99
Return – 13.58%
Ranking – Second
The price of New Gold ETF gained 13.58% in the review period, representing the second best performing mutual fund in November. In the same vein, the net asset value grew by the same margin to close at N575.97 million.
VG 30 ETF – Vetiva Fund Managers Limited (ETF)
The Vetiva Griffin 30 ETF “VG 30 ETF” is an open-ended Exchange Traded Fund managed by Vetiva Fund Managers Limited. The VG 30 ETF is designed to track the performance of the constituent companies of the NGX 30 Index and to replicate the price and yield performance of the Index.
The NGX 30 Index comprises of the top 30 companies listed on the Nigerian Exchange Limited (“NGX”) in terms of market capitalization and liquidity and is a price index weighted by adjusted market capitalization.
29th October 2021
Fund Price – N14.85
26th November 2021
Fund Price – N18.49
Return – 24.51%
Ranking – First
The best performing fund in the period under review is the VG 30 ETF managed by Vetiva Fund Managers Limited, having gained 24.51% in price. Similarly, the net asset value also gained 24.51% in November to close at N2.81 billion.
What you should know about mutual fund
Mutual funds are ideal investment vehicles involving a pool of funds from various investors, which are then invested in diversified portfolios such as equities, bonds, money market instruments, and other kinds of financial securities.
The profit derived from the diversified pool of investments is shared to investors in the funds annually or semi-annually or as stipulated in the fund prospectus.