The equities market continuous beat-down by debt securities led to the re-balancing of portfolios across the country which saw equity-based fund in the market shrink by 0.14 percent in the first quarter of the year. This restructuring process led to corresponding money market, fixed income and bond funds growth to record highs, averaging a 14.35 percent growth in AUM in Q1.
The total AUM of the three funds grew to N599.94 billion at the end of march 2019 from N536.39 billion at the beginning of the year. Dayo Obisan, president, Fund Managers Association of Nigeria (FMAN), in an earlier interview with BusinessDay said the growth in funds was a reflection of products creation and increased effort in distribution.
“Within the asset management space, more products have been created and a lot of Fund managers are into distribution, in terms of marketing,” Obisan told BusinessDay.
Money market funds recorded the highest absolute growth as it saw a N52.36 billion increase in AUM from N465.24 billion to N517.60 billion representing a growth rate of 11.25 percent, Fixed income funds grew by N8.87 billion from N56.84 billion at the beginning of the year to N65.71 billion at the end of Q1 showing a growth rate of 15.60 percent while Bond funds improved by N2.31 billion from N14.30 billion to N16.62 billion representing a growth rate of 16.20 percent in the same time period.
Money market funds are open-ended mutual funds that invest in short-term debt securities such as treasury bills, certificates of deposit, and commercial paper.
The impressive growth span out of the regular suspects in these funds as Stanbic IBTC money market fund, FBN money market fund, ARM money market fund and AXA Mansard money market fund all grew their asset by a combined N45.62 billion out of the total absolute money market fund growth of N52.36 billion which represents an 87.13 percent market share.
In the Fixed income space, Stanbic IBTC dollar fund and Lotus Capital fixed income fund grew their asset by a combined N7.38 billion out of the total absolute growth of N8.87 billion representing 83.23 percent market share.
The Bond funds which saw the highest relative growth was led by United capital Euro bond fund and FBN fixed income fund as they grew their asset by a combined N1.92 billion out of the total absolute growth of N2.31 billion which represents 84.34 percent share of the total bund funds growth.
Since inception, the Asset Under Management (AUM) of Nigerian mutual funds has appreciated by N608.82 billion from N 77.67 billion Net Asset Value (NAV) reported for the week ended August 19, 2011, to N686.49 billion reported at the end of the first quarter of 2019.
Ifeanyi John
