Nigerian mutual fund industry grows by 23.6 % year-to-date

The Nigerian mutual fund industry has expanded 23.6 percent to N186.5bn, going by the latest official asset size values released by the SEC for August 2014.

The expansion has come on the back of some good performances by specific funds, as well as by new entrants into the Nigerian mutual fund scene.

Money market funds, which primarily invest in short term liquid assets like Nigerian treasury bills and commercial papers, have seen their assets grow by 122.9 percent to N59.12bn, from N29.5bn at the beginning of the year. NTB yields have averaged 11.29 percent across 90-days, 180-days and 360-days tenors from January up until August.

The major money market fund players are

Stanbic IBTC Money market fund, FBN Money market fund, UBA Money market fund, and ARM Money market fund.

On March 14th, the Vetiva Griffin 30 Equity Traded Fund (VG 30 ETF) was launched. Its launch saw the entire mutual fund industry deepen by an additional 2.4 percent, by the tune of N2.75 billion.

The ETF sub-sector has subsequently exploded by 1,012 percent to a N3.12 billion industry from a previous value of N277.8 million at the end of Q4 2013.

Since its launch in March, the VG 30 ETF net asset size has grown by 3 percent. The fund has returned 8.8 percent year to date, after returns fell from a high of 13.43 percent in July. The VG 30 ETF tracks the performance of the constituent companies of the NSE 30 Index.

New Gold ETF which tracks gold prices denominated in South Africa’s local currency, the Rand, has also seen its NAV grow by 10.9 percent since the turn of the year. The fund has returned 10.73 percent year to date.

The Bond based fund subsector also recorded a 10.02 percent increase in net asset value. And Real estate funds registered a marginal uptick of 2.27 percent.

Other funds have however recorded underwhelming performances.

Equity based funds, which primarily invest in NSE-listed stocks, have seen a 3.8 percent dip in their Net asset value as at August.

Balanced-based funds which try to balance out their investment portfolio in order to mitigate the risk of any one kind of asset have recorded a subsector-wide dip of 12.6.     

Businessday