By Nkiruka Nnorom
AS investors streamline their investment portfolios to take advantage of expected opportunities in the capital market in 2016, Chief Executive Officer of Stanbic IBTC Asset Management Limited, Bunmi Dayo-Olagunju, has advised investors to diversify their portfolio to ensure optimum returns.
Dayo-Olagunju said considering the volatility in equities and commodity markets, it is imperative for investors to diversify their portfolios by investing in mutual funds and other investment vehicles to hedge their risks.
According to her, the attractiveness of mutual funds or collective schemes is the number of advantages it offers over other investment vehicles, such as flexibility, which makes it possible to either invest a lump sum or make regular installments every month; liquidity, which means the funds can be accessed at any time by the investor who may require money for a variety of purposes such as healthcare, education, vacation and housing. Other advantages include steady returns, professional management, and risk reduction.
“Mutual funds offer investors the advantages of portfolio diversification and professional management at low cost. These advantages are particularly important because diversification and professional management ensure steady returns when compared to other investment instruments. Mutual funds offer an opportunity for steady growth in assets while reducing the attendant risk associated with investing in individual securities,” said Dayo-Olagunju.