ACAP Canary Growth Fund Delivers 13% Return in 2016
By Quantitative Financial Analytics
ACAP Canary Growth Fund returned 13.74 percent in 2016, 19.91 percentage points above its benchmark, the Nigeria All Share Index which closed the year with a negative return of -6.17 percent.
The fund’s 2016 performance is an improvement over its 2015 return of 5.76 percent. The fund which charges a 1.5 percent management fee has therefore generated an inception (10/28/2011) to date (12/31/2016) return of 51.76 percent in total returns terms (including the dividend of N0.04 paid in 2013).
The fund’s assets totalled N1.2billion as of December 30, 2016, up 3.34 percent from the end of 2015, according to SEC NAV summary report analysed by Quantitative Financial Analytics Ltd.
The asset allocation target for the fund, according to its website, is 20 to 70 percent equities, 5 to 50 percent money market instruments, 10 to 40 percent real estate, 10 to 50 percent Fixed income and a maximum of 5 percent in cash.
There are however no specifics of its 2016 asset mix from available information.
According to analysis by Quantitative Financial Analytics Ltd, ACAP Canary Growth Fund had an estimated inflow of N5.8 million and outflow of N114 million but the estimated gain of about N146 million generated in 2016 led to its NAV growth.
ACAP Canary Growth Fund has a risk reward ratio of 7.07:4.65 making it a medium-risk medium return fund.
The fund also has some correlation with the broad stock market.
Quantitative Financial Analytics Ltd has determined that the fund has a correlation of 0.58, an Alpha of 7.35, and Beta of 0.41 when measured against the Nigeria All Share Index.
The R-Squared of the fund with relation to the ASI is .33 showing that only about 33 percent of the fund’s performance is attributable to the performance of the broad stock market in Nigeria while the remaining 67 percent of its performance is due to other factors like the asset selection skills of the fund manager.
ACAP Canary Growth Fund aims to “continuously preserve capital and yield superior returns in the medium to long term”.
The investment requirement in the fund is an initial investment of 50,000 units with subsequent investments in multiples of 10,000 units. This implies that at current price of N0.7275, a new investor will need a minimum of N36,375 to invest in the fund and N7,275 for subsequent investments.
Per available information, the fund manager follows an investment selection process that is “based on strong fundamental analysis and history of technical performance” while the fund is “designed to meet the needs of investors who have medium to long-term investment objectives”.