By Yinka Kolawole
UBA Asset Management Limited defied a difficult operating environment to deliver returns, as high as 10 percent, to unit holders of some of the Funds under the UBA Mutual Funds for the financial year ended March 31, 2011. The UBA Mutual Funds comprises of UBA Balanced Fund, UBA Equity Fund, and UBA Money Market Fund.
Assessing the performance of the Funds at its 4th Annual General Meeting in Lagos, last week, Managing Director of UBA Asset Management Limited, Mr. Haruna Jalo-Waziri, asserted that the Funds performed well in a ‘very difficult year’.
According to him, “the way you qualify a Fund’s performance is by the good it has done, not just by subscription but by performance in terms of increase in the capital that somebody invested. Today, we are paying dividends of 10 kobo and 8 kobo on a one naira Fund, which makes it 10 percent.
So tell me, which Fund has a dividend cover of 10 percent in Nigeria apart from UBA Mutual Funds? Except for our Equity Fund and you know what has happened in the equities market. So, comparatively, with the market and with its peers, the Funds have done very well.”
UBA Balanced Fund declared dividends of 10 kobo per unit after recording a net operating income of N25.719 million for the year. A breakdown of its performance revealed that the Fund opened the financial year with an offer price of N1.3921 and closed at N1.4059 after adjusting for the payment of 10k dividend in the previous year, thereby appreciating by 1.0 percent.
The performance, according to Jalo-Waziri, was impacted by the bearish trend in the stock market and low interest rates that prevailed in the money market in the second quarter and the larger part of the third quarter of 2010.
For the UBA Money Market Fund, a final dividend of 8 kobo was declared, after an initial interim dividend of 4 kobo, following a net operating income of N9.741 million for the year. The fund opened the financial year with an offer price of N1.2778 and closed at N1.2908 after adjusting for the payment of 14k dividend in the previous year, thereby appreciating by 1.02 percent.
Again, the performance was attributed to the impact of the low interest rates that prevailed in the money market in the second and larger part of the third quarters of 2010.
The UBA Equity Fund was the worst hit by the harsh economic environment, recording a net operating loss of N125.366 million for the year and therefore declared no dividend for the unit holders. The Fund opened the financial year with an offer price of N1.1608 and closed at N1.0943 after adjusting for the payment of 10k dividend in the previous year, thereby depreciating by 5.7 percent.
The decline in performance is attributed to the bearish trend in the stock market, with the All Share Index (ASI) of the Nigerian Stock exchange declining by 3.32 percent during the period, and the low interest rates that prevailed in the money market in the second and larger part of third quarters of 2010.