If you are a Nigerian equity market investor and for whatever reason chose to invest your money through mutual funds in 2015, it would have made a whole lot of sense to avoid equity mutual funds sponsored by Stanbic IBTC, Zenith Bank, Afrinvest and ARM.
In 2015, the worst performers according to SEC data analysed by Nairametrics were First City Asset Management Legacy Fund whose unit price was down -25%, Zenith equity fund down -18.6%, Afrinvest equity fund that returned -15.5%, Stanbic IBTC Nigeria equity fund -15.2%, and ARMs aggressive growth fund which returned -12.46%.
Of course that didn’t stop the funds from charging their clients expense ratios (the total percentage of fund assets used for administrative, management, advertising (12b-1), and all otherexpenses), ranging from 1 – 3 percent so their genius stock pickers can live comfortably while helping investors like you lose your hard earned money.
In 2015 inflation averaged 9.01 percent in Nigeria, so the real negative returns were much lower, than the nominal values quoted above.
The NSE all share index declined by 17.4 percent in 2015, meaning some of these equity mutual funds performed much worse than the benchmark.
See Fig 1 & 2 Below
It has been a rather bloody year for the Nigerian economy. And that is understating the problem.
Heavy exposure to oil and gas does have its downsides.