By Adedapo Adesanya
The Securities and Exchange Commission (SEC) has noted that despite present realities, mutual funds invested in the capital market could reach N2 trillion this year.
This was made by the Acting Director of the Commission, Ms Mary Uduk, over the weekend while speaking at the Capital Market Correspondents Association of Nigeria (CAMCAN) forum sponsored by the commission in Lagos.
Represented by the Head, Office of Economics of the SEC, Mr Okey Umeano, she noted that the segment, which currently stands at N1.2 trillion, is growing and urged retail investors to use the funds as a means to access the market.
She assured that the commission was setting up more strategies to develop the Collective Investment Scheme, which the mutual fund segment is under, in the Nigerian capital market so as to boost the economic situation in the country.
“In any advanced market, the Collective Investment Scheme (CIS) form a very big part of the market.
“We at the commission have discovered that some of the investors who lost their savings during the crisis in 2008 are low on confidence.
“That is the reason why we are encouraging retail investors to go through these mutual funds because they are set up and approved by capital market operators and the SEC and the SEC regulates them (operators).
“Currently the size of the segment stands at N1 trillion but we expect it to grow much higher.
“So, we are urging retail investors and high net worth investors to use the mutual funds the route to enter the market,” Ms Uduk said.
She further lauded the impact of local investors as they outperformed foreign investors by 40 percent or N70.3 billion so far.
She said domestic investors transactions show that the domestic institutional transactions accounted for N83.47 billion, while domestic retail transactions stood at N81.67 billion.
“In spite of these trends, clearly, the fundamentals of our markets and economies remain solid and promising as astute investors know.
“I therefore, urge retail investors to leverage on this and invest in the capital market, which is one of the avenues to build sustainable and long-term wealth,” Ms Uduk added.
Also speaking at the event, the Divisional Head, Economic, Research and Policy Management at the Commission, Mr Afolabi Olowookere, noted that the commission expects to see a significant rise of N1.5 trillion or N2 trillion in mutual funds.
“We still expect that size to get to N1.5 or N2 trillion and the reason is that it provides an avenue for retail investors to buy.
“The mutual fund may not have very high return but definitely it won’t have low return and with the SEC at the forefront of financial inclusion, we are pushing collective investment scheme because it brings some form of stability for investments,” he said.
He noted that close to 480,000 investors have trusted their money into the market and there are expectations to see a rise.
“The number of units of account in that segment currently stands at 480,000 investors and it would likely increase,” he added.
