Shareholders have noticed that mutual funds is a good form of investment and less risky when it is compared to investing in individual shares of companies quoted on the Nigerian Stock Exchange , NSE. However they averred that Securities and Exchange Commission, SEC should not subject retail investors to investing in mutual funds but should allow them make their choice of investment in the market
What is your view about Mutual Funds?
Mr Segun Owolabi , Chairman, Concerned Shareholders Association of Nigeria said:”
I have never participated in any of the mutual funds and this is because I have been buying shares for many years. I am a chartered accountant as well, so I know the business of investing in the capital market.
Based on my long experience in investment, my advice is that before any person embarks on any form of investment available in the market, mutual fund inclusive, there is need to understand the type of people that make up the company and those managing it.
Though I have shares in many companies I don’t have anything against either bonds or any form of mutual funds because I see them as another opportunity for those interested in investing in the market, but cannot bear the risk in shareholding.
Investors, most especially those who engage in monthly or weekly contributions, which often result to a situation where some members cannot get their contributions back can embrace collective investment schemes of whatever type they want knowing fully well that they can collect their money at anytime provided they follow the laid down rules.
Another reason why I support mutual fund is that, since it is been regulated by the Securities and Exchange Commission, SEC, investors can be rest assured that their investments are safe. For this reason also, it can be recommend for people seeking a profitable venture to invest in apart from stocks.”
Are you aware of mutual funds, and what is your view about it?
Mr Owolabi Peter, Chairman Integrated Supreme Shareholders Association of Nigeria, said: “ I am aware of mutual funds. We learnt that SEC wants to make it compulsory for retail investors to invest in the market through mutual funds. This is not good. Every investor should be given room to make choice of investment.
What SEC need to do is to continuously educate people on the various form of investment. Concerning the issue of mutual funds, you need to have full knowledge of what you are entering into because it is the understanding you have about how things work in such market that will sustain you, as well as make the venture profitable.
Every investment is a risk, especially in this part of the world. I think investment in mutual funds is good and can be undertaken considering the benefit that comes with it. But if you don’t know about such investments and you involve yourself in it, you might fall into the wrong hands.
What is your view about mutual funds?
Alhaji Shehu Mallam Mikail, Chairman, Constance Shareholders Association of Nigeria, said: “Mutual funds are good and less risky type of investment. But one needs to know the calibre of managers that handle them before investing.
If you are new in the market, to participate in this form of investment, you need somebody that will introduce you to mangers that have been tested in the management of such funds. So mutual funds are good for beginners and aged people who dont need to take high risk.
I learnt that SEC and NSE are planning to force retail investors to invest in mutual funds rather than investing in ordinary shares of a company. I don’t think it will work, because investors all over the world are given the freedom to invest in whatever company they want. Mutual funds really is good and less risky. It is recommended for beginners and those that do not have much knowledge about investment in stock market.”
Are you aware of mutual funds in capital market, what is your take on it?
Alahaji Mukhtar Mukhtar, Shareholders Trustee Association of Nigeria, said: “Yes I am aware that mutual funds exist in our market. But all along I have been investing in many companies’ shares. Of course mutual funds are good for our market particularly those that cannot afford to take high risk. Nevertheless, there are risks in any form of investment. So I encourage shareholders especially the older ones to invest in mutual funds.
The mutual funds are also regulated by the SEC, so it is okay, but people should not be forced to invest in them. There should be a level playing field for all investors. Many people are not aware of such funds including the benefits therein. So a lot of work is needed in terms of investor education.
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