Nigerian mutual funds recorded a negative return on investment (ROI) of 0.4% for the month of October 2022, while their net asset value fell by N13.83 billion to N1.48 trillion.
Data from Nigeria’s Securities and Exchange Commission support this. The Net Asset Value (NAV) of the 131 mutual funds registered with the SEC decreased from N1.49 trillion on September 30, 2018, to N1.48 trillion on October 28, 2022.
According to additional analysis, infrastructure funds saw a gain of N12.78 billion during the review month while subscriptions to fixed-income funds fell by N16.89 billion. Despite mutual funds’ poor performance during the review month, dollar-denominated funds topped the list of top performers.
Since the US Federal Reserve increased interest rates several times in an effort to stem the rising rate of inflation, the US dollar has become stronger against other currencies so far this year.
Given that 2022 saw negative returns across the board for most asset classes, many investors have shifted their money to dollar-denominated securities as a form of inflation insurance.
By tracking the percentage change in offer prices between September 30 and October 28, 2022, analysts were able to monitor the performance of these mutual funds.
The top-performing mutual funds in October 2022 according to returns are listed below. Additionally, we highlighted how their net asset value changed over time and included fund profiles taken directly from their websites.
Nova Dollar Fixed Income Fund – Novambi Asset Management
The Nova Dollar Fixed Income Fund gives investors the chance to protect their capital while generating returns from investments in medium- to long-term securities with financial institutions recognized by the Securities & Exchange Commission, such as Sovereign Eurobonds, Corporate Eurobonds, Money Market, and Cash.
30th September 2022
Fund Price – N330.41
28th October 2022
Fund Price – N337.55
Return – 2.2%
Ranking – Fifth
With a return of 2.2%, Nova Dollar Fixed Income Fund came in fifth place among the top-performing mutual funds for October 2022. Additionally, the fund’s net asset value rose by 2.1% from N84.47 million on September 30 to N86.24 million at the end of October 2022.
FBN Dollar Fund (Retail) – FBNQuest Asset Management Limited
A mutual fund called FBN Dollar Fund gives investors exposure to debt securities denominated in USD. The retail fund requires a minimum investment of $1000 and has a moderate to medium risk.
30th September 2022
Fund Price – N55,258.07
28th October 2022
Fund Price – N56,487.7
Return – 2.2%
Ranking – Fourth
As of October 28, 2022, the net asset value of the FBN Dollar fund increased 4.9% from the N12.42 billion recorded the previous month to N13.02 billion. On the list of top-performing mutual funds for the month under consideration, the dollar fund came in at number four.
United Capital Eurobond Fund – United Capital Asset Mgt. Ltd
The United Capital Eurobond Fund is an open-ended mutual fund that invests in top-tier corporations and dollar-denominated Eurobonds that are floated by the Federal Government of Nigeria. The initial investment is $1,000, and subsequent amounts are multiples of $500.
30th September 2022
Fund Price – N54,010.27
28th October 2022
Fund Price – N55,235.37
Return – 2.3%
Ranking – Third
As of October 28, 2022, the United Capital Eurobond fund’s net asset value was down 6.4%, or N75.73 billion. Although it is a Eurobond fund, the fund is dollar-denominated and is trailing the other dollar funds that are producing positive returns.
Stanbic IBTC Dollar Fund – Stanbic IBTC
A dollar fixed-income fund called the Stanbic IBTC Dollar Fund (SIDF) was introduced by Stanbic IBTC Asset Management in January 2017 with the goals of supplying currency diversification, generating income, and ensuring steady growth in the USD.
To do this, it intends to invest at least 70% of the portfolio in high-quality Eurobonds, 30% or more in short-term USD deposits, and 10% or less in USD stocks that have been authorized and registered by the Securities and Exchange Commission of Nigeria.
30th September 2022
Fund Price – N584.75
28th October 2022
Fund Price – N599.35
Return – 2.5%
Ranking – Second
The best-performing dollar fund for October 2022 is Stanbic IBTC, though PACAM balanced fund ultimately won out after managing a 2.5% ROI during the review month. On the other hand, as of October 28, 2022, the net asset value fell by 2.7% to N184.02 billion.
PACAM Balanced Fund – PAC Asset Management Ltd
The main goal of the PACAM Balanced Fund is to generate long-term capital appreciation through investments in a mix of equities and fixed-income securities. The Fund Allocation Model emphasizes diversification and stability of investments using the fixed-income asset class to balance out the volatility of equity investments while maximizing the benefits of both asset classes, according to information on the company website.
The fund specifically invests in a variety of investment-grade fixed income instruments, money market instruments, and real estate assets in Nigeria in addition to high-quality listed equities on the floor of the Nigerian Stock Exchange.
30th September 2022
Fund Price – N1.65
28th October 2022
Fund Price – N1.79
Return – 8.4%
Ranking – First
The top-performing mutual fund in October 2022 was PACAM Balanced Fund, which recorded a ROI of 8.4% during the month under consideration. On the other hand, as of October 28, 2022, the net asset value fell 1.5% to N156.35 million.
What you should know about mutual funds
Mutual funds are financial institutions that pool money from many investors and invest it in a diverse range of securities, including stocks, bonds, money market instruments, and other kinds of assets.
Professional fund managers run mutual funds, investing the capital of the fund in an effort to generate income and capital gains for the investors.
Investors in the funds receive their share of the profit from the diversified pool of investments annually, semi-annually, or as otherwise specified in the prospectus for the fund.