By MICHAEL EBOH
The value of mutual funds and Exchange Traded Funds, ETFs listed in the Memorandum Quotation segment of the Nigerian capital market stands at N85.919 billion as at March 2, 2012, dropping by N756 million in one week.

According to data obtained from the Securities and Exchange Commission, SEC, the Net Asset Value of the 44 mutual funds and one ETF depreciated by N756 million or 0.87 per cent from N86.675 billion as at February 24, 2012.

The value of the funds had increased by 10.19 per cent or N7.525 billion to N81.305 billion from N73.78 billion at which it started the month.

The decline in the value of the funds for the period, according to analysts, was as a result of a general decline in the capital market in the period under review.

However, the analysts are predicting an improvement in the days ahead, which will be driven by renewed investment activities by fund managers ahead of the end of the first quarter.

According to the analysts, portfolio restructuring and increased investment drive is usually expected at the tail end of every quarter. The analysts said a mutual fund’s portfolio is usually structured and maintained to match the investment objectives stated in its prospectus.

Further analysis of the mutual funds as at March 2, 2012, shows that Union Homes Real Estate Investment Trust Scheme, REITS, managed by Union Homes Savings and Loans Plc, with a unit price of N50, recorded the highest Net Asset Value, NAV of N14.376 billion, followed by Stanbic IBTC Nigerian Equity Fund, managed by Stanbic IBTC Asset Management Limited, with a Net Asset Value of N12.296 billion and a unit price of N7, 179.35.

Stanbic IBTC Money Market Fund, also managed by Stanbic IBTC Asset Management Limited, traded at N100 per unit, recorded Net Asset Value of N5.520 billion; ARM Discovery Fund, managed by Asset and Resources Management Company Limited, traded at N223.05 per unit, recorded Net Asset Value of N4.436 billion and FBN Heritage Fund, managed by FBN Capital Limited and trading at N90.19 per unit recorded Net Asset Value of N4.093 billion.

Others are: SIM Capital Alliance Fund, managed by SIM Capital Alliance Limited, recorded Net Asset Value of N3.393 billion with a unit price of N105.7 per unit; FSDH Asset Management Limited’s Coral Growth Fund, with a unit price of N1,652.90 recorded Net Asset Value of N3.138 billion, Zenith Bank Plc’s Zenith Equity Fund recorded Net Asset Value of N2.964 billion, Stanbic IBTC Asset’s Stanbic IBTC Ethical Fund, with a Net Asset Value of N2.769 billion and Kakawa Asset Management Company Limited’s Guaranteed Income Fund recorded N2.751 billion.

According to SEC, the Net Asset Value of the mutual funds or collective investment scheme is the fund price per share.

SEC said the per-share Naira amount of the fund is calculated by dividing the total value of all the securities in its portfolio, less any liabilities, by the number of the fund shares outstanding.

Mutual funds have the main advantage of providing small investors access to professionally managed, diversified portfolios of equities, bonds and other securities, which would be quite difficult to create with a small amount of capital.  Shareholders participate in the gain or loss of the fund, based on their holding in the fund.

Mutual fund units, or shares, are issued and can typically be purchased or redeemed as needed at the fund’s current Net Asset Value (NAV) per share, which is sometimes expressed as NAVPS.