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The Meristem Equity Market Fund (MEMF) had a positive year-to-date (YtD) return of +13.99percent in October 2021 which is significantly above the +10.56percent returns recorded for September 2021, according to the October Mutual Funds Report.
The fund in the month of October had a positive return of +3.34percent, this was significantly below the returns on the fund benchmark (80percent NSE30 and 20percent average 182day T-bills yield) of +4.48percent as well as the market return of +4.52 percent.
In seeking to achieve fund objectives, the Fund Manager has set the target asset allocation within identified risk levels. The distribution of funds between asset classes and stock selection drive the investment performance over time.
With the flattening of yields, the fund managers expect to see more participation in the equities market as well as continuous bargain hunting and profit-taking in the equities market. Going further into this November, the fund managers expect to invest in equities with high returns as well as offload investments that have limited upside potential of Meristem Equity Market Fund.
“We the fund managers maintain our strategy of investing in fundamentally justified stocks with potentials for capital appreciation, while also taking advantage of any developments in the market. The portfolio contained 16 securities: 15 equity stocks and fixed deposit”, they noted in October Mutual Funds report.
Read also: Nigeria’s equities market opens new month in red
The Meristem Equity Market Fund (MEMF) aims to achieve long term capital appreciation through investment in equity securities with a focus on a portfolio of stocks listed on the floor of the Nigerian Exchange Limited. The Fund is an actively managed open-ended collective investment scheme that mainly invests in equity.
The Fund seeks to outperform (gross of fees) its benchmark (80percent NSE30 and 20percent Average 182day TBills).
According to Meristem Asset Management, the firm managing this pooled fund, “The objectives would be achieved by taking advantage of the economies of scale that come with the pooling together of funds to actively invest. These will enable it to operate in an extremely efficient manner, thereby minimizing transaction cost.”
“The Fund seeks to achieve its objective of delivering long-term capital appreciation by relying on its qualitative research capabilities to identify outperforming stocks and instrument to be held by the Fund.
The Fund’s assets will typically be invested in a diversified portfolio of blue-chip companies that tend to be market leaders in their respective industries. Some percentage of the Fund will however be kept in liquid investment to provide both for redemption and portfolio rebalance to capture market values,” Meristem Asset Management noted.
