Mutual fund segment generates N65 billion profit in Q1

Mutual funds asset class has generated 10.44 per cent or N64.892 billion profit in the first quarter of 2019, from N621.593 billion recorded as at December 28, 2018 to N686.485 billion, a data released by the Security and Exchange Commission (SEC), has shown.


The data showed that despite the decline of 1.24 per cent witnessed in the equities market during the period under review, the Nigerian mutual fund managers witnessed a growth.

All the categories of mutual funds appreciated in Q1, except ethical funds, which declined by N12 million.A breakdown of performance in the segment showed that equities-based funds rose by N55 million, while money-based funds, which is the most active, rose by N52.363 billion.
Furthermore, bond funds gained N2.317 billion, while fixed income, real estate and mixed funds, appreciated by N8.87 billion, N1.069 billion and N341 million respectively.

The huge inflow underscores the fact that investors are still interested in mutual funds, especially money market funds, which attracted most of the new inflows.Mutual fund is a pool of funds brought together by a professional fund manager from several investors to invest in selected underlying securities.

The underlying securities can be one or a combination of stocks, fixed income securities, real estate and commodities.A mutual fund portfolio is structured and maintained to match different investment objectives and the type of mutual fund an individual invests depends on their financial objectives and appetite for risk.

Meanwhile, SEC has advised retail investors in the capital market to invest in mutual funds to help reduce investment risk.The Acting Director-General of SEC, Ms Mary Uduk, gave the advice at the post capital market committee meeting held recently in Lagos, noting that such investments are managed by professionals and they help investors diversify their asset classes to minimise risk.She however reiterated the commission’s commitment to protect investors through various initiatives, adding: “The Commission has put in place a number of initiatives to protect investors as well as boost their confidence.”