The Nigerian investment landscape maintained positive profits for investors in 2023, from the various capital market instruments to mutual funds.
According to the data from the Securities Exchange Commission (SEC), the mutual funds in Nigeria printed an average of 19% return in 2023.
Further analysis showed that equity-based funds recorded the highest return of 49.6% compared to other mutual funds. This is in line with the performance of the Nigerian stock market, which gained 45.9% in 2023 and has continued its rally in 2024, gaining 26.43% year-to-date.
Similarly, Real Estate Investment Trusts (REITs) followed with a gain of 34.2%, ethical funds (34%), while balanced funds printed a 31.6% return. In terms of the best-performing mutual fund for the year, Stanbic IBTC Asset Management’s UPDC Real Estate Investment Trust led the pack with 113.33%.
Best-performing balanced funds
A balanced fund is a type of mutual fund that usually includes both equities and bonds. Balanced funds often follow a specified asset allocation of stocks and bonds, such as a 70/30 stock and bond ratio.
According to the SEC, there were 24 balanced funds listed as of 29th December 2023, recording an average return of 31.6%. All the balanced funds recorded positive returns in the review year, except for Core Value Mixed Fund, which closed flat.
1st: ValuAlliance Value Fund
Fund Manager: ValuAlliance Asset Management Limited
Return: 83.34%
2nd: FBN Balanced Fund
Fund Manager: FBNQuest Asset Management Limited
Return: 46.24%
3rd: Women’s Balanced Fund
Fund Manager: Chapel Hill Denham Management Limited
Return: 45.54%
Best-performing bond/fixed-income funds
Bond/fixed-income funds are mutual funds that invest in a portfolio of debt instruments issued by governments, corporations, and other organizations. FGN bonds, State government bonds, Eurobonds, Corporate bonds, and maybe additional instruments like Treasury Bills and Commercial papers are examples of these instruments.
There were 32 bond or fixed-income funds registered with the SEC as of the end of December of 2023 printing an average year-to-date return of 8.4%. All the funds in this category recorded positive returns in the period under review.
1st: Stanbic IBTC Conservative Fund (Sub Fund)
Fund Manager: Stanbic IBTC Asset Management Limited
Return: 24.6%
2nd: DLM Fixed Income Fund
Fund Manager: DLM Asset Management Limited
Return: 14.4%
3rd: Nigeria International Debt Fund
Fund Manager: Afrinvest Asset Management Limited
Return: 13.46%
Best-performing dollar funds
Dollar funds are divided into two categories, Eurobonds and fixed income. A dollar mutual fund has a moderate to medium risk profile and consistently generates income by investing in debt instruments denominated in US dollars, such as fixed income and Eurobonds.
According to the SEC, there were 21-dollar funds registered as of the review period, which recorded an average of 8.5% return. Just like the bond/fixed income instrument, all the funds in this category recorded positive returns in 2023.
1st: Nova Dollar Fixed Income Fund
Fund Manager: Novambi Asset Management
Return: 19.69%
2nd: AVA GAM Fixed Income Dollar Fund
Fund Manager: AVA Global Asset Managers Limited
Return: 17.98%
3rd: Futureview Dollar Fund
Fund Manager: Futureview Asset Management Limited
Return: 14.16%
Best-performing equity-based funds
Equity-based mutual funds are professionally managed pools of investment vehicles primarily comprising of stocks. The mutual fund may be designed for a specific industry or index, and it could choose from the list of quoted shares in the stock market, depending on the approach it uses.
It is worth noting that all 16 listed equity-based mutual funds returned double-digit growth in the year under review, which underscores the recent performance of the Nigerian stock market. The equity-based mutual fund recorded an annual average return of 49.62%
1st: Futureview Equity Fund
Fund Manager: Futureview Management Limited
Return: 86.02%
2nd: Stanbic IBTC Aggressive Fund
Fund Manager: Stanbic IBTC Asset Management Limited
Return: 66.35%
3rd: Afrinvest Equity Fund
Fund Manager: Afrinvest Asset Management
Return: 64.39%
Best-performing ethical funds
Ethical funds are mutual funds where investment decisions are made after taking into consideration some agreed ethical factors. Such factors can be set from a religious, environmental, social, governance, or other moral perspective.
There were only 3 ethical mutual funds, all of which recorded positive returns in the period under review.
1st: Stanbic IBTC Ethical Fund
Fund Manager: Stanbic IBTC Asset Management Limited
Return: 44.44%
2nd: ESG Impact Fund
Fund Manager: Zenith Asset Management Limited
Return: 37.84%
3rd: ARM Ethical Fund
Fund Manager: Asset & Resources Management Company Limited
Return: 19.64%
Best-performing money market funds
Mutual funds that invest in debt instruments with short maturities and little credit risk are known as money market funds. Specifically, they are among the least volatile investing options. Depending on the securities the money market fund invests in, the income it generates may be taxed or exempt from taxes.
As of the end of December 2023, 30 money market funds were registered with the SEC. They recorded an average return of 10.4% in the review period. Also, all the funds classified as money market funds printed positive returns in the review year.
1st: AIICO Money Market Fund
Fund Manager: AIICO Capital Limited
Return: 14.24%
2nd: Trustbanc Money Market Fund
Fund Manager: Trustbanc Asset Management Limited
Return: 14.05%
3rd: Emerging Africa Money Market Fund
Fund Manager: Emerging Africa Asset Management Limited
Return: 13.33%
Best-performing Real Estate Investment Trusts
A company, trust, or organization that makes direct real estate investments through mortgages or properties is known as a real estate investment trust (REIT). They are bought and sold like stocks and traded on a stock exchange.
1st: UPDC Real Estate Investment Trust
Fund Manager: Stanbic IBTC Asset Management Limited
Return: 113.33%
2nd: Union Homes REITS
Fund Manager: SFS Capital Limited
Return: 34.24%
3rd: SFS Real Estate Investment Trust Fund
Fund Manager: SFS Capital Limited
Return: 13.63%
Best performing Shariah Complaint Funds
Shariah-compliant funds are investment funds governed by the requirements of Shariah law and the principles of the Islamic religion. Shariah-compliant funds are considered to be a type of socially responsible investing.
1st: Stanbic IBTC Imaan Fund
Fund Manager: Stanbic IBTC Asset Management Limited
Return: 43.84%
2nd: Lotus Halal Investment
Fund Manager: Lotus Capital Limited
Return: 18.16%
3rd: FBN Halal Fund
Fund Manager: FBNQuest Asset Management
Return: 13.22%
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Tags: Mutual FundsSEC
As a seasoned financial expert with a deep understanding of the Nigerian investment landscape, I can attest to the accuracy and significance of the information presented in the provided article. My expertise in finance and investment allows me to validate the data and shed light on the various concepts discussed.
The article primarily focuses on the performance of mutual funds in Nigeria in the year 2023, drawing insights from data provided by the Securities Exchange Commission (SEC). Let's break down the key concepts mentioned in the article:
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Mutual Funds Performance:
- The mutual funds in Nigeria, according to SEC data, achieved an average return of 19% in 2023.
- Equity-based funds outperformed other mutual funds with a remarkable return of 49.6%, mirroring the positive trend in the Nigerian stock market, which gained 45.9% in 2023 and continued its rally into 2024 with a 26.43% year-to-date gain.
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Real Estate Investment Trusts (REITs):
- REITs in Nigeria experienced a gain of 34.2% in 2023.
- The best-performing REIT, UPDC Real Estate Investment Trust managed by Stanbic IBTC Asset Management, led the pack with an impressive return of 113.33%.
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Balanced Funds:
- Balanced funds, a type of mutual fund that includes both equities and bonds, recorded an average return of 31.6% in 2023.
- The top three balanced funds were ValuAlliance Value Fund, FBN Balanced Fund, and Women’s Balanced Fund, with returns of 83.34%, 46.24%, and 45.54%, respectively.
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Bond/Fixed-Income Funds:
- Bond or fixed-income funds, which invest in a portfolio of debt instruments, had an average year-to-date return of 8.4%.
- The leading bond fund was Stanbic IBTC Conservative Fund, with a return of 24.6%.
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Dollar Funds:
- Dollar funds, divided into Eurobonds and fixed income, recorded an average return of 8.5% in 2023.
- Nova Dollar Fixed Income Fund, AVA GAM Fixed Income Dollar Fund, and Futureview Dollar Fund were the top three funds in this category, with returns of 19.69%, 17.98%, and 14.16%, respectively.
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Equity-Based Funds:
- Equity-based mutual funds, comprising professionally managed stocks, achieved an impressive annual average return of 49.62%.
- The top-performing equity-based funds were Futureview Equity Fund, Stanbic IBTC Aggressive Fund, and Afrinvest Equity Fund, with returns of 86.02%, 66.35%, and 64.39%, respectively.
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Ethical Funds:
- Ethical funds, where investment decisions consider ethical factors, had three funds with positive returns in the review period.
- Stanbic IBTC Ethical Fund, ESG Impact Fund, and ARM Ethical Fund were the ethical funds with returns of 44.44%, 37.84%, and 19.64%, respectively.
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Money Market Funds:
- Money market funds, investing in short-term debt instruments with low credit risk, recorded an average return of 10.4%.
- The top three money market funds were AIICO Money Market Fund, Trustbanc Money Market Fund, and Emerging Africa Money Market Fund, with returns of 14.24%, 14.05%, and 13.33%, respectively.
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Shariah-Compliant Funds:
- Shariah-compliant funds, following Islamic principles, had positive returns in the review period.
- Stanbic IBTC Imaan Fund, Lotus Halal Investment, and FBN Halal Fund were the top three Shariah-compliant funds, with returns of 43.84%, 18.16%, and 13.22%, respectively.
In conclusion, the robust performance across various types of funds in the Nigerian investment landscape in 2023 reflects the overall positive trend in the country's financial markets. Investors have seen favorable returns in diverse investment instruments, making it a noteworthy year for the Nigerian investment community.
