today, as a
continuation of
last week’s edition on mutual funds, we are going to look at some mutual funds that are in operation in Nigeria.
IBTC Nigerian Equity Fund is the biggest mutual fund in Nigeria with a net asset value in excess of N30 billion as at the end of 2007. The fund, which is managed by IBTC Asset Management Limited, commenced operations in 1997. The units of the fund were issued at an initial price of N1,000 per unit and the offer price is presently in excess of N11,000.
The equity fund is mainly capital market-based and requires a minimum subscription of N50,000. The principal investment is guaranteed for a minimum of three months.
The fund has a minimum target allocation of 75 per cent in stocks quoted in the Nigerian Stock Exchange and 25 per cent in money market instruments. A return on investment of 62.14 per cent was realized in 2007 and annual growth is estimated at an average of 53 per cent.
The primary objective of the fund is to achieve long-term capital appreciation by investing in high quality securities quoted on the Nigerian Stock Exchange and in other instruments approved by SEC.
IBTC Asset Management Limited also manages two other funds – Stanbic IBTC Bank’s Ethical Fund and Stanbic IBTC Bank’s Guaranteed Investment Fund. The ethical fund was floated in 2005 at a par value of N1.0 per unit. It has a minimum target allocation of 75% in stocks quoted in the Nigerian Stock Exchange and a maximum of 25% in money market assets.
Its choice of investments excludes stocks of companies that operate in the brewery and tobacco sectors or involved in the production of arms and ammunition, gambling or any other businesses considered harmful to society. The fund’s focus is to permit a clear moral conscience by investing with the interest of society in mind. It is designed for those who do not want to make profit at the expense of their religious beliefs and principles
The minimum requirement for investing in the fund is N50,000 and the principal investment is guaranteed against diminution in value provided the investment is held for a minimum of three months.
The Stanbic IBTC Guaranteed Investment was launched in December 2007 at a nominal value of N100 per unit. The fund builds its assets around fixed income securities such as government bonds, money market securities and other securities approved by SEC. It has a minimum target allocation of 75 per cent in fixed income securities and a maximum of 25 per cent in securities, essentially blue chip companies listed on the Nigerian Stock Exchange.
Investment in fixed income securities is biased in favour of tax exempt assets and those that offer the best post-tax return. The principal investment is guaranteed against diminution subject to funds kept for a minimum of three months. The fund is designed to provide regular income and long-term capital appreciation.
ARM Discovery Fund was established in 1995 and was initially named equity growth fund. The open-ended fund is managed by Asset and Resources Management Company Limited [ARM]. The fund’s investment targets are equities, fixed income securities and real estate.
The investment mix is designed to provide capital growth while achieving an optimum balance between risk and return. The fund’s investments have allocated targets of a minimum of 40 per cent in equities and a maximum of 65 per cent. The fund achieved a return of 56 per cent in 2007. Minimum investment amount is N10,000 with minimum additional investment amount of N5,000.
ARM Aggressive Growth Fund is the second mutual fund managed by ARM and was established in 2004. It has a targeted allocation of 80 per cent of its investments in equities quoted in the Nigerian Stock Exchange and 20 per cent allocation to money market and other fixed income investments.
The fund is designed for investors with the primary goal of achieving capital appreciation and having above average appetite for risk for the possibility of higher returns in the long-term. The fund achieved an 86 per cent return in 2007 and an annual average of 41.4 per cent over the four years of its operations. Minimum investment in the fund is N50,000.
Coral Growth Fund was set up in 2001 and managed by FSDH Asset Management Limited [FAML]. The fund invests 65 per cent of its resources in equities quoted on the Nigerian Stock Exchange and the balance of 35 per cent on investment grade fixed income securities.
The minimum investment amount in the fund is N50,000 with a minimum additional investment of N10,000. The investment objective is to grow capital value over the long-term. It is designed to meet the needs of private pension/retirement plan, savings and investment plans and educational and contingency plans. The fund has recorded an annual average growth of 33.98 per cent by the end of 2006.
Coral Income Fund is the second of the three funds managed by FAML. The funds focus mainly on fixed income securities in both the money and capital markets. As much as 70 per cent of its investments constitute fixed income securities while the remaining 30 per cent is targeted at equities quoted on the Nigerian Stock Exchange.
The objective of the fund is to enable investors preserve the value of their capital and achieve a stable stream of income. It is designed for the less aggressive investors who are desirous of preserving their stock of capital.
Coral Ethical Fund is the third mutual fund managed by FAML and focuses on investing in equities quoted in the Nigerian Stock Exchange but which have been screened to meet specified ethical values. Qualifying equities exclude companies whose principal business is deriving interest income and those engaged in the production of alcoholic beverages.
Interest bearing securities are also excluded from the fund’s investing focus. The objective of the fund is to provide investors with capital growth over the long-term through investment choices that do not offend their ethical and social values.
Courtesy: Proshareng.com
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