Ranking: Best Performing PFA’s in Nigeria as at June 2019

It has been a year since the implementation of the multi-fund structure by Nigeria’s National Pension Commission, PenCom.

Earlier on in the year, we had reported on the reporting readiness of the fund managers where we noted that though many of them had made efforts to meet the reporting requirements based on observed changes on their respective websites.

One year after, it may be worthwhile to look at the performance of the newly introduced funds 1 and 3

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What is the Multi Fund Structure:

For those who may have forgotten or do not still know, the National Pension Commission, PenCom, in an attempt to achieve a proper alignment between the assets and liabilities of pension funds as well as making pension fund investments in line with the risk appetite and profile of pension contributors, introduced the multi-fund structure which took effect on July 1, 2018.

The multi-fund structure shall comprise Fund 1, Fund 2, Fund 3 and Fund 4, which will differ between each other according to their overall exposure to variable income instruments.

• Fund 1 is allowed a maximum exposure of 75% of portfolio value to variable income instruments.
• Fund 2 can only be exposed to such instruments to a maximum of 55%
• While Fund 3 and Fund 4 will be allowed a maximum exposure of 20% and 10% respectively.
• In like manner, there are stipulations for minimum exposure as well.
• These are 20% for Fund 1, 10% for Fund 2 and 5% and 0% for Funds 3 and 4.
• The determination of what fund a pension investor belongs to shall almost exclusively be based on the investor’s age.

Membership of Fund 1 is strictly by choice made by the pension contributor while membership of Fund 2 is for contributors that are 49 years or younger, those that are 50 years or older belong to Fund 3 while Fund 4 is for RSA retirees only.

Contributors in Fund 2 can migrate to Fund 1 if they so wish so far as they make a formal request while those in Fund 3 can also migrate to Fund 2 upon formal request. However, no member of Fund 4 above the age of 50 is allowed to migrate to Fund 1 but you can only make a switch from one fund to the other once, in 12 months free of charge, any switch request that is more frequent than 12 months intervals attracts a yet to be determined fee.

Performance: Analyzing the performance of Funds 1 and 3 has not been easy due to the dearth of the data and information. While some of the pension fund managers have been reporting the daily valuation of their Funds 1 and 3, others are spewing out the data in formats that are not amenable to analysis. Be that as it may, analysts at Quantitative Financial Analytics have been able to harvest enough data to make a confident statement on the performance of Funds 1 and 3.

Inception to date Performance: Since the multi-fund structure became effective on July 1, 2018, I find it necessary to report on the inception to date performance. Inception to date performance is the performance of a financial instrument, in this case, Funds 1 and 3, from start.

Inception to date analysis indicates that Anchor Pensions Retirement Savings Fund 1 beat them all with an inception to date (ITD) return of 10.78%, followed by ARM Pensions Retirement Savings Fund 1 with 10.69%.  Below is the inception to date, (June 30^th, 2019), the ranking of fund 1 category.

FUND 1 Inception to Date Performance

Best Performing Fund:

Name of Fund: Anchor Pensions RSA Pension Fund 1

ITD Performance %:  10.78%

ITD Gain per unit:  N0.11

Second Best Performing Fund:

Name of Fund: ARM Pensions RSA Pension Fund 1

ITD Performance %:  10.69%

ITD Gain per unit:  N0.11

3rd Best Performing Fund:

Name of Fund: Trust Pensions RSA fund 1

ITD Performance %:  10.56%

ITD Gain per unit:  N0.11

4th Best Performing Fund:

Name of Fund: Radix Pensions RSA Fund 1

ITD Performance %:  10.23%

ITD Gain per unit:  N0.10

5th Best Performing Fund:

Name of Fund: Stanbic IBTC Pensions RSA Fund 1

ITD Performance %:  9.76%

ITD Gain per unit:  N0.10

Fund 3 Inception to Date Performance:

Fund 3, seems to be the better performing fund category since the introduction of the multi-fund structure. This could be because of their greater exposure to fixed income securities and less exposure to risky instruments like equities. On an inception to date basis, most Fund 3 funds are making returns in the double digits. Here is a list of the five best performing fund 3 funds

Best Performing Fund:

Name of Fund: AIICO Pensions RSA Pension Fund 3

ITD Performance %:  13.9%

ITD Gain per unit:  N0.14

Second Best Performing Fund:

Name of Fund: AXA Mansard Pensions RSA Pension Fund 3

ITD Performance %:  13.49%

ITD Gain per unit:  N0.13

3rd Best Performing Fund:

Name of Fund: Premium Pensions RSA Fund 3

ITD Performance %:  13.12%

ITD Gain per unit:  N0.13

4th Best Performing Fund:

Name of Fund: Fidelity Pensions RSA Fund 3

ITD Performance %:  11.75%

ITD Gain per unit:  N0.12

5th Best Performing Fund:

Name of Fund: Stanbic IBTC Pensions RSA Fund 3

ITD Performance %:  11.70%

ITD Gain per unit:  N0.11

Q2 Returns YTD Performance.

Year to date Performance: On a year to date basis, both Funds 1 and 3 seem poised to generate annualized returns in the neighborhood of 13%, going by there Q2 returns.

Here are the first 5 best performing funds among the fund 1 category for Q2

Best Performing Fund:

Name of Fund: AXA Mansard Pensions RSA Pension Fund 1

YTD Performance %:  6.63%

YTD Gain per unit:  N0.07

Second Best Performing Fund:

Name of Fund: ARM Pensions RSA Pension Fund 1

YTD Performance %:  6.63%

YTD Gain per unit:  N0.07

3rd Best Performing Fund:

Name of Fund: Stanbic IBTC Pensions RSA fund 1

YTD Performance %:  6.35%

YTD Gain per unit:  N0.07

4th Best Performing Fund:

Name of Fund: Radix Pensions RSA Fund 1

YTD Performance %:  6.34%

YTD Gain per unit:  N0.07

5th Best Performing Fund:

Name of Fund: Trust Pensions RSA Fund 1

YTD Performance %:  6.25%

YTD Gain per unit:  N0.06

Q2 Returns YTD Performance.

Best Performing Fund 3:

Name of Fund: AXA Mansard Pensions RSA Pension Fund 3

YTD Performance %:  7%

YTD Gain per unit:  N0.07

Second Best Performing Fund:

Name of Fund: AIICO Pensions RSA Pension Fund 3

YTD Performance %:  6.8%

YTD Gain per unit:  N0.07

3rd Best Performing Fund:

Name of Fund: Premium Pensions RSA Fund 3

YTD Performance %:  6.68%

YTD Gain per unit:  N0.07

4th Best Performing Fund:

Name of Fund: Fidelity Pensions RSA Fund 3

YTD Performance %:  6.4%

YTD Gain per unit:  N0.07

5th Best Performing Fund:

Name of Fund: Stanbic IBTC Pensions RSA Fund 3

YTD Performance %:  6.49%

YTD Gain per unit:  N0.07

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