BusinessDay did a year-to-date analysis on the performance of 74 funds distributed over six broad portfolio classes traded on the Security and Exchange Commission (SEC) using monthly data from 29th December 2017 to June 22nd 2018, with a view to evaluating the stock/fixed income selection skills of the fund managers.
While some mutual funds where seen performing well, others were moving in southward trajectory.
BusinessDay’s year-to date analysis on equity fund managers in the period under review, showed that FBNQuest Capital Asset Management topped the gainers chart with 10.1 percent increase in its unit price from 173.31 to 190.81.
Other top gainers were; Stanbic IBTC Aggressive Fund (Sub Fund) with 6.8 percent increase in its unit price, from 2,047.05 to 2,186.37 and United Capital Asset Mgt. Ltd with 4.3 percent in its unit price from 0.93 to 0.97 in the same period.
“They performed well because they were not holding DANGCEM at market rate, considering DANGCEM had 30 percent of the NSE market capitalisation and was down 3 percent in that period. As a result if the overall market was going down theirs would not have not gone in the same direction,” Wale Okunriboye, Head, Investment Research at Sigma Pensions said.
The equity fund managers that therefore lagged the best performers were; First City Asset Management Plc with a 2.1 percent decrease in its unit price from 1.43 to 1.40, Chapel Hill Denham Mgt. Limited with a 2.9 percent decrease from 12.69 to 12.31, Meristem Wealth Management Limited with a 3.9 percent decrease from 14.21 to 13.66 and AXA Mansard Investments Limited with a 1.60 decrease from 152.77 to 150.32.
Johnson Chukwu, MD of Cowry Assets Limited said ordinarily, any good fund manager should have a good performance, because a portfolio investor will first identify the instrument that qualify for investment in their portfolio, that is those instruments that have very good fundamentals.
“The selectiveness of investors in picking instruments into their portfolio is such that any good portfolio or fund manager should ordinarily outperform the market index,” Chukwu said.
Meanwhile, amongst the various bond fund managers, FBNQuest Fixed Income Fund topped the gainers chart with 7.7 percent increase in unit price from 1,149.09 to 1,238.09 between December and June 22nd 2018. Other top gainers were; United Capital Asset Mgt. Ltd with 5.7 percent increase in unit price from 1.57 to 1.66 and Stanbic IBTC Asset Mgt. Limited with 5.4 percent increase from 176.45 to 186.05 same period.
While for the Fixed Income Fund, EDC Fund Management Limited topped the fixed income fund gainers chart with 12.6 percent increase in unit price from 1,141.49 to 1,285.77.
Lead Asset Management Limited followed in line with 11.2 percent increase, Coronation Asset Management with 8.5 percent and Stanbic IBTC Conservative Fund (Sub Fund) with 8.5 percent increase in unit price. However, Investment One Funds Management Limited showed no change in unit price.
Ayo Akinwunmi, Head of Research at FSDH Merchant Bank said the investment strategy and the investment tenor of the fund manager are important determinants of their return
“The ability of the fund manager to select stocks of investment instrument is an important factor in determining the return on that fund. Some fund managers are aggressive while some are a little bit conservative,” Akinwunmi said.
Under the Mixed Funds, FBNQuest Capital Asset Mgt Limited topped the gainers chart with 14.5 percent increase in unit price from 140.66 to 161.09 from December to June 22nd 2018.
While Coronation Asset Management with 9.3 percent increase in unit price from 1.07 to 1.17, PAC Asset Management Limited (7.9%),Stanbic IBTC Asset Mgt. Limited (6.2%) and FDSH Asset Management (6.1%) were also among the top gainers.
While the Mixed Fund Managers that lagged in performance were; United Capital Asset Mgt. Ltd with a 2.2 percent decrease in unit price, ValuAlliance Asset Management Limited and Vetiva Fund Managers with a record of (-0.04) and (-12.9%) respectively.
On whether or not economic macro indictors influenced the performance of the funds analysed by BusinessDay, analysts said macroeconomic indicators affects every stock or bond because it is macro and as such it affects the economy. As such, the key thing is selecting those good fundamentals that can help the equity to perform well.
“On the macro factors it will have generic impact on the entire market so those that performed well were exposed to growth stocks,” Tajudeen Ibrahim of Chapel Hill Denham Securities said.
A further analysis on the mutual funds revealed that Money Market Fund had the highest share of the mutual fund market. Money market funds as a percentage of total mutual funds had a significant increase from 49.6 percent in December 2016, to 69.25 percent in 2017 and 75.09 percent as at June 22nd 2018.
