DLM Asset Management Limited, a subsidiary of DLM Capital Group, has launched a N1.5 billion new money market fund. The fund is targeted at investors seeking low-risk short-term investment options.
The fund, which has received approval from the Securities and Exchange Commission (SEC), is structured to invest in short-term debt instruments such as treasury bills, commercial papers, and other liquid assets. According to the company, the fund is open-ended and aims to offer capital preservation, liquidity, and regular income to investors.
With a minimum entry of N10,000 and top-ups allowed in multiples of N5,000, the fund is open to both individual and institutional investors. Investors are expected to receive income distributions quarterly and will have access to an online platform to monitor their investments.
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The formal launch took place at the company’s headquarters in Lagos and was attended by representatives of partner institutions, including STL Trustees Limited (Trustee), UBA Nominees Limited (Custodian), G. Elias (Legal Counsel), DataPro Limited (Rating Agency), Africa Prudential Plc (Registrar), and Deloitte & Touche (Auditor).
According to details shared by the fund managers, the proposed asset allocation for the new investment product is heavily tilted towards short-term government securities. These securities are expected to make up 50 percent of the portfolio.
Bank placements will account for 30 percent, while commercial papers and other money market instruments are allotted a target weighting of 19 percent. A minimal portion, about 1 percent, is reserved for cash holdings. The allocation ranges provide flexibility, with government securities allowed to move between 25 and 100 percent, bank placements between 0 and 70 percent, and cash between 0 and 5 percent.
At the end of FY 2023, DM Asset Management posted a net income of N1.74 billion.
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DLM Asset Management has now joined a growing number of Nigerian fund managers introducing money market funds. These fund managers are keying into the rising demand for secure, income-generating investment products amid inflationary pressures and tight liquidity.
