Lotus Capital Gets Approval to List N1.5b Fixed Income Fund

By Modupe Gbadeyanka

The Quotation Committee of Nigerian Stock Exchange (NSE) has approved the listing of the Lotus Capital Fixed Income Fund.

With the regulatory approval, Lotus Capital Halal Investments Limited can now list its N1.49 billion fixed income fund on the memorandum board of the NSE.

This will also allow the instruments to be traded on the local stock exchange.

Recall that the Lotus Capital Fixed Income Fund had earlier been approved by Lotus Capital’s Shari’ah Advisory Board as well as the Securities and Exchange Commission (SEC).

The Lotus Capital Fixed Income Fund is an open-ended collective investment scheme, which invests strictly in Shari’ah-compliant fixed income instruments and contracts such as sovereign and sub-sovereign sukuk, corporate sukuk, shari’ah-compliant fixed term investments, murabaha or cost-plus financing contracts and ijarah or lease contracts.

Based on the Shari’ah, it implies that the Fund’s investments must be ethical and must not invest in interest bearing instruments such as treasury bills, conventional bonds or conventional bank deposits.

Also, the Fund will also not invest in the stock market in order to avoid the associated volatility. The Fund intends to distribute 80 percent of its returns to investors on a quarterly basis.

The Lotus Capital Fixed Income Fund projects a return on investment of 15 percent for 2018. However, the Fund’s returns will be determined by the performance of the underlying assets and therefore, may deviate significantly from the forecast.

A total of 1.487 million units of Lotus Capital Fixed Income Fund of N1,000 each will be listed by way of introduction on the memorandum board of the Exchange.

There are 46 mutual funds already listed on the memorandum quotation of the Exchange, including Lotus Capital Halal Investment Fund, another mutual fund under the management of Lotus Capital Halal Investments Limited.

According to the fund manager, the Lotus Capital Fixed Income Fund seeks to attract investors interested in low risk, liquidity, capital preservation, shari’ah-compliant investment, competitive returns, portfolio diversification and a regular income stream