AGAINST the backdrop of increased interest and investments in Mutual Funds in Nigeria, Nigeria’s Securities and Exchange Commission (SEC) announced that total Asset Under Management (AUM) of mutual funds in Nigeria has crossed N300 billion mark.
This has been attributed to various factors not excluding the current state of the economy, stock market and interest rate fluctuations as well as much improved mutual funds offerings. This is further backed by a recent report by Quantitative Financial Analytics which estimated that Nigerian mutual funds attracted the sum of N42 billion inflows in Q1, 2017 as against the N49 billion inflow recorded the entire 2016. Nigeria’s mutual funds’ assets also grew to N318 billion as at the beginning of H2, 2017, up by 42 percent year-to-date (YTD) against the 2016-year end value of N223.6 billion.
Speaking on the trend at the launch of one of such funds, The Coronation Mutual Funds, the Senior Fund Manager and Head, Coronation Asset Management, Mr. Emeka Okolo, said that active portfolio management by experienced professionals offer investors better prospects on their investments especially in periods of market volatility and economic downturns as is being experienced in Nigeria, making mutual funds an optimal choice.
On the Coronation Mutual Funds, Okolo harped on the capacity and expertise of Coronation Asset Management to deliver competitive returns to investors in the Coronation Mutual Funds, noting that the proposed investment mix and the fund structures distinguish the Funds.
The recently launched naira denominated open-ended mutual funds by Coronation Assets Management which witnessed a high subscription rate by individual, retail and institutional investors, has continued to elicit excitement. The Mutual Funds N1.5billion Money Market Fund, N400million Fixed Income Fund and the N200 million Balanced Fund, were all offered at par of one naira each.
Chairman of the Bank, Tunde Folawiyo, said that the funds offer all strata of investors, individual and corporate, an opportunity to diversify their investment portfolios backed by the strength of the Coronation Brand and managed by a team of experienced professionals at Coronation Asset Management. According to him, the Money Market Fund will exclusively invest in short-dated money market instruments, offering capital preservation and liquidity to investors.
The Fixed Income Fund will invest in FGN and investment grade corporate bonds while the Balanced Fund will invest in a diversified portfolio of carefully chosen equity securities with strong fundamentals and prospects of delivering long term positive investment returns, while tactically investing in fixed income securities to actively manage short term volatility in its equities exposure.
The Money Market Fund and the Fixed Income Fund have been assigned low to medium risk ratings, “A-(NG)(f)” and “AA-/FV4 (NG)(f)” respectively, by Agusto & Co, a foremost Nigerian rating agency.
This IPO for the Mutual Funds came on the back of a strong financial year for the premium financial institution. It should be recalled that Coronation Merchant Bank, the parent company of Coronation Asset Management, grew its profits by 128% from December 2015 to December 2016. The Group’s financial strength, coupled with a focus on sound risk management, prudent investment strategies as well as a tradition of delivering excellent value to all stakeholders, has made the IPO for the Mutual Funds more inviting to investors.
The Coronation Mutual Funds are being overseen by institutions with strong track recordsof providing superior financial services with Coronation Asset Management acting as the Fund Manager, Citibank Nigeria as Custodian and United Securities Limited as Registrar to all three funds. Stanbic IBTC Trustees Limited will acts as Trustee to the Balance and Fixed Income Funds while United Capital Trustees will act as Trustee to the Money Market Fund.