Total investment in mutual funds has grown to N817.25bn as of September 20, 2019.
Data obtained from the Securities and Exchange Commission on Thursday showed the value of mutual funds increased by 31.48 per cent from N621.6bn on December 28, 2018 to N817.25bn on September 20.
Mutual funds are professionally-managed investment programmes that pool money from many investors to purchase securities.
They are made up of ethical funds, equity-based funds, money market funds, bonds funds, fixed income funds, real estate investment funds and mixed funds.
Money market funds, which invest only in highly liquid instruments such as cash, cash equivalent securities and high credit rating debt-based securities with a short-term maturity — less than 13 months-recorded the highest investment of N611.35bn. This is made up of funds pooled from 19 investment schemes.
Money market funds offer high liquidity with a very low level of risk.
The schemes under the fund are Stanbic IBTC Money Market Fund (N283.67bn), FBN Money Market Fund (N157.86bn), United Capital Money Market Fund (N7.99bn), AIICO Money Market Fund (N1.08bn), ARM Money Market Fund (N68.60bn), Meristem Money Market Fund (N1.11bn), AXA Mansard Money Market Fund (N30.01bn), Greenwich Plus Money Market Fund (N3.82bn) and Cordros Money Market Fund (N7.87bn).
Others are PACAM Money Market Fund (N669.60m), Chapel Hill Denham Money Market Fund (N1.86bn), Abacus Money Market Fund (N9.71bn), EDC Money Market Fund Class A (N9.68bn), EDC Money Market Fund Class B (N679m), Coronation Money Market Fund (N6.36bn), Zenith Money Market Fund (N8.63bn), Afrinvest Plutus Fund (N563m), Legacy Money Market Fund (N8.39bn), GDL Money Market Fund (N812m), Vetiva Money Market Fund (N232m) and FSDH Treasury Bill Fund (N1.72bn).
The top three fund managers under the money market fund are Stanbic IBTC Asset Management Limited, FBN Capital Asset Management Limited and Asset & Resources Management Company Limited.
Fixed income funds, which are funds that buy investments and pay a fixed rate of return like government bonds, investment-grade corporate bonds and high-yield corporate bonds, recorded the highest increase in investment at 70 per cent.
Fixed income funds aim to have money coming into the fund on a regular basis, mostly through the interest that the fund earns.
Investment in fixed income funds increased from N56.85bn in December to N97.05bn in September.
Real estate funds, pooled from three sources ? Skye Shelter Fund, Union Homes REITs and UPDC Real Estate Investment Fund – stood at N45.63bn.
Mixed funds, which are made up of investment in different asset classes, recorded a drop in investment as the funds reduced to N23.51bn from N24.24bn at the end of May and N24.62bn in April.
Bond funds stood at N24.68bn while equity-based funds stood at N10.55bn.
The Divisional Head, Trading Business, Nigerian Stock Exchange, Mr Jude Chiemeka, while speaking at the NSE/Fund Managers Association of Nigeria Mutual Funds Workshop in Lagos on Thursday, said the growing interest in mutual funds could be attributed to their being professionally managed investment vehicles, which offered diversification benefits to a broad range of investors.
He said the capital market had witnessed exponential growth in the popularity of mutual funds over the past few years, making it the fastest growing asset class.
According to him, as of year-end 2018, the mutual funds industry had a net asset value of N621.6bn from 78 registered funds, and as of the end of August 2019, the figure stood at N801.5bn from 87 registered funds.
Chiemeka said it represented a 29 per cent increase in the net asset value of mutual funds over a period of eight months and was projected to hit the N1tn mark by the end of the year 2019.
He stated that the workshop came on the back of the launch of the Exchange’s mutual funds trading platform in February 2019; an initiative birthed in collaboration with Central Securities Clearing System Plc, FMAN and the Association of Stockbroking Houses of Nigeria.
He said, “Over the next few months, the Nigerian Stock Exchange will be rolling out measures and initiatives, as well as leading further engagements aimed at providing an avenue for market stakeholders to engage on the prospects of Mutual Funds in Nigeria.”