Mutual Funds Gain N3b in Nine Months of 2016

By Quantitative Financial Analytics

It is no longer news that the Nigerian stock market has been choppy in 2016 with investors scrambling to uncover hidden opportunities. Of the 10 major market indices in Nigeria, four have recorded positive returns YTD as at the end of Q3.

The NSE all-share index boasts of a negative 1.7 percent return so far this year. Compared to similar period in 2015, this performance is actually an improvement.

By the end of Q3 2015, all the major indices, but two, were in the red with the all-share index at -9.92 percent. There seems to be an asset class that has not done so badly in the first nine months of 2016. That asset class is Nigerian Mutual Funds.

Going by data released by the Security and Exchange Commission and analysed by Quantitative Financial Analytics, mutual funds in Nigeria made an estimated N3 billion profit on a YTD basis by the end of Q3 2016.

Fund Level Analysis

Surprisingly, the volatility that characterized the equity market paid off as equity based funds made an estimated N1.425 billion profit.  Fund by fund analysis indicates that all but the Paramount Equity Fund generated profits of varying amounts. Bond funds also held their own with an estimated N844 million gain with all but UBA Bond Fund and FBN Fixed Income Fund making profits of some sort. Three out of the 10 funds in the balanced fund category made losses but the category generated a total estimated gain of N209k.

The highest gain came from Stanbic IBTC Equity Fund with N642 million, followed by Stanbic IBTC Absolute Fund with N451 million, New Gold ETF took the third place with N293 million. The greatest losses were recorded by UBA Bond Fund and UBA Balanced Fund.

Fund Manager Level Analysis

Fund manager level analysis indicates that Stanbic IBTC Asset Management topped the chart with N1.57 billion gain. Of all the 11 funds being managed by Stanbic IBTC, only the Stanbic IBTC 30 ETF Fund ended Q3 with a loss. Asset & Resources Management Ltd (ARM) came second with N415 million gain while New Gold managers and FBN Capital Asset Mangers took the third and fourth positions with N292 million and N291 Million respectively. All the 4 funds being managed by ARM Ltd made gains while five of the six funds overseen by FBN Capital Asset Managers also recorded gains by the end of Q3. 2 out of the 3 funds being managed by FSDH Asset Management had positive returns while Lotus Capital Ltd recorded one positive and one negative return. On the other hand, only one out of the 4 funds being managed by UBA Asset Management Company made a gain.

Among the Fund Managers with perfect/clean records are Afrinvest Asset management whose two funds made gains, Alternative Capital Ltd.’s ACAP Canary Growth Fund recorded N115 million gain. Others are ARM Ltd with all 4 funds recording profits, AXA Mansard Investment’s two funds also ended the quarter with a YTD gain. First City Asset Management’s Legacy Short Maturity Fund and Legacy Equity Fund generated a total estimated N67 million gain while Investment-One also had a clean slate as well as Meristem Wealth Management Ltd. SFS Capital and New Gold Managers are also in the league. Sterling Capital Ltd also joined the league as all the 3 funds under its management generated gains.