Fund managers in Nigeria’s Collective Investment Scheme (CIS) raised their bet in equities and money market instruments at the expense of fixed income and real estate, their September investment available to Business Day has shown.
A balanced fund combines a stock component, a bond component and sometimes a money market component, in a single portfolio.
The balanced funds under the Securities and Exchange Commission (SEC) regulation are: Women Investment Fund, UBA Balanced Fund, Union Trustees Mixed Fund, Nigeria Global Investment Fund, Stanbic IBTC Balanced Fund, Indo-Nigeria Unit Trust Fund, FBN Heritage Fund, and DV Balanced Fund.
Ideally, these hybrid funds stick to a relatively fixed mix of stocks and bonds that reflects either a moderate (higher equity component) or conservative (higher fixed-income component) orientation, depending on the fund manager’s risk appetite.
The monthly investment schedule for September 2014 released recently by the Securities and Exchange Commission (SEC) shows that fund managers of the Women Investment Fund invested 57.04% of it in equities, 33.70% in money market, while 6.60% of the fund was invested in fixed income securities.
Also in the review period, 21.37% of UBA Balanced Fund was in equities, 58.40% in money market, while 19.96% was invested in fixed income securities.
Fund managers of Union Trustees Mixed Fund invested 53.36% of the fund’s assets in equities, 26.80% in money market, 15.11% of the fund’s asset were allocated to fixed income securities, while 4.23% of the fund’s asset went to real estate.
A balanced fund is geared toward investors who are looking for a mixture of safety, income and modest capital appreciation. The amounts that such a mutual fund invests into each asset class usually must remain within a set minimum and maximum.
Likewise, 68.43% of the Nigeria Global Investment Fund was invested in equities, 24.85% in money market, while the fund managers invested 5.71% of the fund in fixed income securities.
Only 39.82% of Stanbic IBTC Balanced Fund was invested in equities, 55.08% of the fund’s asset in the review period was invested in money market, while the fund managers invested only 2.39% in fixed income securities.
Fund managers of Indo Nigeria Unit Trust Fund invested 30.05% in equities, 65.87% of the fund in money market; while 39.29% of FBN Heritage Fund was invested in equities, 38.70% in money market, and 21.85% in fixed income securities.
Likewise, 52.10% of DV Balanced Fund was invested in equities, 38.86% in money market instruments, while the fund managers held 9.04% as cash in the September review period.
Iheanyi Nwachukwu
