Economy
Four Best-Performing Equity Mutual Funds of Q1 2018
By Quantitative Financial Analytics Ltd
Nigeria’s equity market witnessed some calmness and subdued volatility in the first quarter of the year.
Quantitative Financial Analytics Realized Volatility index (NSErealVol) stood at 12.98, as at March 29, 2018 down from 15.68 recorded by the end of the previous year.
In addition, inflation in Nigeria moderated while the Dollar exchange rate stabilized around the N360 range within the quarter even as yields continued to fall along all maturities. All those had some positive effect on equity market which got translated into the equity mutual funds.
How Did Energy Sector Perform in Q1?
During the Q1 of 2018, the Nigeria All Share Index (ASI) increased by 3,261.32 points representing a positive performance of 8.53 percent. The market grew by 15 percent in Jan, 2018, losing marginally by 2 percent and 4 percent in February and March to end the quarter with a positive return.
In spite of the market performance within the quarter, we have identified four mutual funds that did much better in the quarter. Here they are:
Meristem Equity Mutual Fund
Meristem Equity Market fund seeks capital appreciation for the long run by investing in a basket of high quality equity securities in Nigeria. The fund gained about N95 million or 46 percent in 2017 and has gained about 52.7 million or 17 percent in Q1, 2018, according to our analysts. In Q1, 2018, it attracted an estimated 8.5 million of inflows to leave its net asset value at N364 million by the end of the first quarter.
Stanbic IBTC Aggressive Fund
Stanbic IBTC Aggressive fund seeks to provide liquidity whilst maintaining low to medium volatility of return over the long-run. The fund invests a minimum of 60 percent of its assets in the equity market and the other 40 percent in fixed income market according to its fact sheet. Stanbic IBTC Aggressive fund gained about N95 million or 48 percent in 2017 and has gained about N43.6 million or 12.58 percent in Q1, 2018, according to our analysts.
In 2017, it suffered a net outflow of about N10 million but in Q1, 2018, it attracted an estimated N169 million of inflows to leave its net asset value at N502 million by the end of the first quarter
Frontier Fund
The Frontier Fund has the primary objective of achieving long-term capital appreciation to unit holders by investing in carefully selected money and capital market instruments.
The Fund gained about N42 million or 22 percent in 2017 and has gained about N27 million or 10.55 percent in Q1, 2018, according to our analysts.
In 2017, it suffered a net outflow of about N3 million but has attracted net inflow of N5 million in Q1, 2018 to leave its net asset value at N286 million by the end of the first quarter
UBA Equity Fund
The United Capital Equity Fund Invests in quoted equities that are traded on the Floor of the Nigerian Stock Exchange (NSE). Its objective is to achieve high returns over a medium to long-term period by investing in select portfolio of equity securities according to its fact sheet.
The Fund which is suitable for investors with a long-term outlook gained about N420 million or 45.8 percent in 2017 and has gained about N145 million or 10.45 percent in Q1, 2018, according to our analysts.
In 2017, it suffered a net outflow of about N122 million and has also suffered about N15 million net outflow in Q1, 2018 to leave its net asset value at N1.5 billion by the end of the first quarter.
Though these funds have been stellar in their performance, it is worthy of note to state that past performance is not a guarantee of future performance.
By Adedapo Adesanya
The National Pension Commission (PenCom) has defended its decision to allow Pension Fund Administrators (PFAs) to invest in the parent companies of their custodians, insisting that adequate safeguards are in place to protect contributors’ funds.
The director-general of the pension regulator, Ms Omolola Oloworaran, speaking on Tuesday during the Meet the Press Briefing at the Presidential Villa, Abuja, said the commission’s decision to relax the investment restriction followed a comprehensive risk assessment that found minimal conflict of interest.
She explained that under PenCom’s investment regulations, PFAs are only permitted to invest pension assets in carefully selected instruments that meet stringent criteria, including profitability, strong credit ratings and proven track records.
According to her, the commission regularly reviews its investment regulations, conducts routine examinations and spot checks on PFAs to ensure strict compliance with established risk management guidelines.
“PFAs cannot just go into the stock market and buy any kind of stock. There are strict guidelines. Companies must demonstrate profitability, have a proven track record and satisfy other criteria before pension funds can invest,” she said.
Ms Oloworaran noted that each PFA also operates under the oversight of a board, an investment committee and a risk management committee, providing additional layers of governance to safeguard contributors’ funds.
She said PenCom recently issued a circular allowing PFAs to invest in the parent companies of their custodians after determining that the potential conflict of interest was negligible.
The PenCom boss explained that the parent companies involved are largely Tier-1 banks, including First Bank, United Bank for Africa (UBA) and Zenith Bank, which she described as A-rated institutions with strong financial foundations.
She said the policy was intended to widen investment opportunities for pension funds without compromising safety.
Using Stanbic IBTC as an example, Ms Oloworaran explained that if its custodian is Zenith Bank, the previous restriction prevented the pension administrator from investing in Zenith Bank shares despite the bank’s strong performance.
“We reviewed the risks and any potential conflict of interest and found the risks to be very low. That is why we opened that investment window,” she said.
By Aduragbemi Omiyale
Analysts at Meristem Research have predicted that the inflation rate for June 2026 in Nigeria should marginally rise to 15.95 per cent on a year-on-year basis from the 15.93 per cent reported in May 2026.
The National Bureau of Statistics (NBS) is expected to release inflation numbers for last month later today, Wednesday, July 15, 2026.
In its report sighted by Business Post, Meristem Research said it expects inflationary pressures to re-emerge across key economies in the near term, as the re-escalation of the US-Iran conflict has reignited upward pressure on global oil prices.
It disclosed that this marks a sharp reversal from most of June, when the ceasefire between the two countries helped drive oil prices lower, raising expectations of some relief on the inflation front.
With conflicts now flaring up again, oil prices are likely to increase again, and the anticipated easing in energy-driven inflation may not materialise as broadly as earlier envisaged.
“Nonetheless, some relief is likely from the food segment, where robust supply conditions across major producing regions and softening demand should continue to ease food price pressures,” it stated.
The team also explained that it projected a 15.95 per cent inflation rate because of the lingering effects of persistent food price pressures.
“However, we expect core inflation to moderate as the sharp reversal in energy prices begins to filter through to transportation, distribution, and other energy-related costs, easing underlying price pressures.
“On a month-on-month basis, the combined effect of lower petrol prices, a relatively stable Naira, and the gradual pass-through of reduced energy costs across the supply chain should exert further downward pressure on inflation.
“Based on our assessment, food inflation is expected to remain the key swing factor, as seasonal pre-harvest supply constraints are likely to offset some of the gains from lower logistics costs,” it said.
By Adedapo Adesanya
The duo of Central Securities Clearing System (CSCS) Plc and Afriland Properties Plc weakened the NASD Over-the-Counter (OTC) Securities Exchange by 1.61 per cent on Tuesday, July 14.
CSCS Plc saw its stock value drop N9.08 to close at N82.40 per share compared with the preceding session’s N91.48 per share, and Afriland Properties Plc slid by 17 Kobo to sell at N15.00 per unit versus N15.70 per unit.
The losses recorded by the two securities pulled back the market capitalisation by N41.64 billion to N2.546 trillion from N2.587 trillion, and cracked the NASD Security Index (NSI) by 69.36 points to 4,242.31 points from 4,311.67 points.
It was observed that the exchange witnessed two price advancers during the session, led by FrieslandCampina Wamco Nigeria Plc, which gained N1.37 to end at N151.37 per share compared with the previous day’s N150.00 per share, and Food Concepts Plc chalked up 5 Kobo to settle at N2.50 per unit versus N2.45 per unit.
The volume of securities traded by market participants surged by 50.7 per cent to 13.7 million units from the previous 9.1 million units, while the value of securities went down by 79.7 per cent to N65.2 million from N320.4 million, and the number of deals crashed by 3.6 per cent to 27 deals from the previous session’s 28 deals.
At the close of transactions, Great Nigeria Insurance (GNI) Plc remained the most traded stock by value on a year-to-date basis, with the sale of 3.4 billion units for N8.4 billion, trailed by Infrastructure Credit Guarantee (Infracredit) Plc, which exchanged 2.3 billion units valued at N6.5 billion, and CSCS Plc with 73.9 million units transacted for N5.2 billion.
GNI Plc also closed the trading day as the most traded stock by volume on a year-to-date basis, with 3.4 billion units worth N8.4 billion, followed by Infracredit Plc with 2.3 billion units traded for N6.5 billion, and Resourcery Plc with 1.1 billion units valued at N415.7 million.
