Nigerian fund managers shifted focus away
from equities in favour of money market instruments in their allocation of over
N11billion in Balanced Funds assets, BusinessDay checks have shown.
Balanced Fund is a class of Collective
Investment Scheme (CIS) which combines a stock component, a bond component and,
sometimes, a money market component, in a single portfolio. The hybrid fund
sticks to a relatively fixed mix of stocks and bonds that reflects either a
moderate or conservative orientation.
Analysis of the fund managers’ monthly
investment schedule breakdown for June 2015 showed that the recorded bearish
nature of the market, along
with the not too impressive outings of most quoted
companies on the nation’s Stock Exchange in the second half results, may dampen
investors confidence in the instruments and consequently provide a haven
for the investors in the money market instruments.
The analysts said last night, that contrary
to the natural rule of a balanced fund providing investors with a mixture of
safety, income and modest capital appreciation, the current negative returns in
excess of minus 9 percent returns from the equities. This is making them
jittery in their investment in equities, with the attendant preference for
mutual funds causing its asset value to rise to N207billion, an increase of
N1billion from the preceding week N206 billion.
Some of the Balanced Funds currently under the
regulation of the Securities and Exchange Commission (SEC) are Women Investment
Fund, UBA Balanced Fund, Union Trustees Mixed Fund, FBN Heritage Fund, Nigeria
Global Investment Fund, Stanbic IBTC Balanced Fund, Indo Nigeria Unit Trust
Fund, DV Balanced Fund, Nigeria International Growth Fund, and Nigeria Energy
Sector Fund.
BusinessDay checks on fund managers monthly
investment schedule breakdown for June 2015 at the Securities and Exchange
Commission revealed that 20.66% of Nigeria Energy Sector Fund was placed in
equities, while 78.75% of the balanced fund assets were placed in money market
instruments by its fund manager –Sterling Capital Market Limited.
Further checks shows that 64.43% of Indo
Nigeria Unit Trust Fund was placed in money market instruments, while 34.69%
was in equities and none in fixed income instruments. The fund manager of this
balanced fund is Sterling Capital Market Limited.
Also, 16.56% of United Capital Balanced Fund
was placed in equities, 18.15% in fixed income instruments, while 65.27% of the
same fund was placed in money market instruments. United Capital Asset
Management Limited is the fund managers to this fund.
In addition, 46.63% of the Women Investment Fund was placed in equities,
7.11% in fixed income instruments, and 35.40% of the fund’s asset was placed in
money market instruments. The Women Investment Fund is managed by Chapel Hill
Denham Management Limited.
CDL Asset Management Limited, the fund
managers to Union Trustees Mixed Fund placed 45.33% of the fund in equities,
16.26% in fixed income instruments, while 31.90% was invested in money market
instruments.
Notable money market instruments consist of
negotiable certificates of deposit (CDs), bankers’ acceptances, Treasury Bills,
Commercial Papers, and repurchase agreements (repos).
Chapel Hill Denham Management Limited, fund
managers to Nigeria Global Investment Fund invested 62.20% of the balanced fund
asset in equities, 2.93% in fixed income, and 21.60% money market.
Stanbic IBTC Asset Management Limited, the
fund managers to Stanbic IBTC Balanced Fund, placed 39.84% of the balanced fund
in equities, 2.90% in fixed income instruments, and 56.82% in money market
securities.
A balanced fund is geared toward investors
who are looking for a mixture of safety, income and modest capital
appreciation.
FBN Capital Asset Management Limited, the
fund managers to FBN Heritage Fund invested 31.54% of the balanced fund assets
in equities, 26.24% in fixed income instruments, and 42.01% of the asset in
money market.
In addition, 35.21% of DV Balanced Fund asset
was placed in equities, 20.89% in fixed income instruments, while 43.02% of the
balanced fund asset was placed in money market by its fund manager –Vetiva Fund
Managers.
Analysts at Lagos-based Financial Derivatives
Company Limited had noted that as the market remained bearish, investors sought
shelter in alternative asset classes.
Currently, at the Nigerian equities market,
unimpressive second quarter (Q2) and half-year (H2) results have further helped
dampen investor confidence at Customs Street.
As returns from Nigerian equities routed
further negative in excess of minus 9 percent, many investors who became
jittery sought for haven in mutual funds, causing its asset value rise to
N207billion, an increase of N1billion from the preceding week N206billion.
Iheanyi Nwachukwu
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