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The value of assets under management (AUM) in the Nigerian mutual funds industry hit all-time high as it surged to N322.99 billion as at week-ended July 21 2017, latest data from the Securities and Exchange Commission (SEC) has shown.
The SEC data showed that AUM value rose 11.03 per cent from May 26 2017. Industry stakeholders say that the increase is caused by the increased interest of investors who have been flocking towards Nigerian mutual funds recently.
Analysts hinge the resurgent interest on such factors as the current state of the Nigerian economy, stock market and interest rate fluctuations as well as much improved mutual funds offerings.
This assertion 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 the first quarter of 2017 compared to the N49 billion inflows recorded in the entire 2016 fiscal year.
Mutual funds’ assets in Nigeria also grew to N318 billion as at the beginning of the first half of 2017, 42 per cent spike since the beginning of the year. AUM stood at N223.6 billion as at the end of 2016.
It is against this background the Coronation Asset Management Limited (CAM) recently launched its two mutual funds with a view to leveraging its capacity and experience to help investors realise better returns and minimise risks of their investments.
“No one can doubt the capacity and expertise of Coronation Asset Management to deliver competitive returns to investors in the Coronation Mutual Funds,” said Emeka Okolo, senior fund manager and head of Coronation Asset Management at the launch of one of the funds. “The level of professionalism and quality of investments will be difficult to match by other mutual fund managers in Nigeria and the West African sub-region. This, coupled with the proposed investment mix and the fund structures, distinguish these Mutual Funds.”
Okolo noted 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.
He said that the recently launched Naira-denominated, open-ended mutual funds by CAM, which witnessed a high subscription rate by individuals, retail and institutional investors, has continued to elicit excitement.
The Mutual Funds, which include the N1.5 billion money market fund, the N400 million fixed income fund, and the N200 million balanced fund, were all offered at par of 1 Naira each.
Tunde Folawiyo, chairman of Coronation Merchant Bank, said that the funds offer all strata of investors, individual and corporate alike, an opportunity to diversify their investment portfolios backed by the strength of the Coronation brand and managed by a team of experienced professionals at CAM.
The money market fund and the fixed income fund have been rated “A- (NG)(f)” and “AA-/FV4 (NG)(f)”by Agusto & Co, a foremost Nigerian rating agency. The ratings indicate low to medium risk characteristics of the funds.
The initial public offering (IPO) for the funds came on the back of a strong financial year for the premium financial institution.
Coronation Merchant Bank, the parent company of CVAM, had grown its profits by 128 per cent from December 2015 to December 2016. The Group’s financial strength, sound risk management, prudent investment strategies, tradition of excellent value delivery to all stakeholders, attracted investors to the IPO for the mutual funds.
The Coronation mutual funds are being overseen by institutions with strong track records of providing superior financial services. CAM acting is the Fund Manager, Citibank Nigeria is custodian, and United Securities Limited is 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.
INNOCENT UNAH
