The mutual funds market has seen an increased appetite from investors as the total investment in mutual funds rise by N172bn in seven months.
Data obtained from the Securities and Exchange Commission on Wednesday showed the value of mutual funds increased from N621.6bn on December 28 to N793.7bn on July 26.
Mutual funds are professionally-managed investment programmes that pool money from many investors to purchase securities.
They are made up of ethical funds, equity-based funds, money market funds, bonds funds, fixed-income funds, real estate investment funds and mixed funds.
Money market funds, which invest only in highly liquid instruments such as cash, cash equivalent securities and high credit rating debt-based securities with a short-term maturity – less than 13 months – recorded the highest investment of N595.37bn, made up of funds pooled from 19 investment schemes.
Money market funds offer high liquidity with a very low level of risk.
The schemes under the fund are Stanbic IBTC Money Market Fund (N275.79bn), FBN Money Market Fund (N164.72bn), United Capital Money Market Fund (N6.91bn), AIICO Money Market Fund (N1.01bn), ARM Money Market Fund (N64.71bn), Meristem Money Market Fund (N1.06bn), and AXA Mansard Money Market Fund (N27.89bn).
Others are Greenwich Plus Money Market Fund (N3.63bn), Cordros Money Market Fund (N6.40bn), PACAM Money Market Fund (N663m), Chapel Hill Denham Money Market Fund (N1.78bn), Abacus Money Market Fund (N9.32bn), EDC Money Market Fund Class A (N8.19bn), EDC Money Market Fund Class B (N421m), Coronation Money Market Fund (N6.35bn), Zenith Money Market Fund (N7.75bn), Afrinvest Plutus Fund (N564m), Legacy Money Market Fund (N7.26bn) and GDL Money Market Fund (N952m).
The top three fund managers under the money market fund are Stanbic IBTC Asset Management Limited, FBN Capital Asset Management Limited and Asset & Resources Management Company Limited.
Fixed income funds, which are funds that buy investments and pay a fixed rate of return like government bonds, investment-grade corporate bonds and high-yield corporate bonds, recorded the highest increase in investment at 61.39 per cent.
Fixed income funds aim to have money coming into the fund on a regular basis, mostly through the interest that the fund earns.
Investment in fixed income funds increased from N56.85bn in December to N91.75bn in July.
Real estate funds, pooled from three sources ― Skye Shelter Fund, Union Homes REITs and UPDC Real Estate Investment Fund – stood at N45.52bn, an increase of 4.57 per cent from the N43.53bn recorded in December.
Mixed funds, which are made up of investment in different asset classes, recorded a drop in investment as the funds reduced to N23.63bn at the end of July from N24.45bn in December.
Bond funds increased by 53.60 per cent from N14.31bn in December to N21.98bn in July as it pooled funds from nine sources.
Equity-based funds and ethical funds recorded a decline in investment as they depreciated by 10.59 per cent and 10.15 per cent, respectively.
Investment in equity-based funds dropped from N11.99bn in December to N10.72bn in July, while ethical funds’ investment dropped from N5.22bn to N4.69bn.
