This guide will be walking you through the best performing mutual funds in Nigeria.
Investors buy mutual funds from the fund itself or through a broker for the fund, rather than from other investors.
The price that investors pay for the mutual fund is the fund’s per-share net asset value plus any fees charged at the time of purchase, such as sales loads.
Mutual fund shares are “redeemable,” meaning investors can sell the shares back to the fund at any time. The fund usually must send you the payment within seven days.
Before buying shares in a mutual fund, read the prospectus carefully. The prospectus contains information about the mutual fund’s investment objectives, risks, performance, and expenses.
What are Mutual Funds?
A mutual fund is a type of financial vehicle made up of a pool of money collected from many investors to invest in securities like stocks, bonds, money market instruments, and other assets. Mutual funds are operated by professional money managers, who allocate the fund’s assets and attempt to produce capital gains or income for the fund’s investors. A mutual fund’s portfolio is structured and maintained to match the investment objectives stated in its prospectus.
Mutual funds give small or individual investors access to professionally managed portfolios of equities, bonds, and other securities. Each shareholder, therefore, participates proportionally in the gains or losses of the fund.
Mutual funds invest in a vast number of securities, and performance is usually tracked as the change in the total market cap of the fund—derived by the aggregating performance of the underlying investments.
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10 Best Performing Mutual Funds in Nigeria
Here is the list of Best Performing Mutual Funds in Nigeria
1. Stanbic IBTC Aggressive Fund
Stanbic IBTC Aggressive Fund (SIAF) is an open-ended mutual fund created to provide liquidity while ensuring sustainable attractive returns to investors in the long term.
SIAF is biased towards equities and invests a minimum of 60% of its Net Asset value in equities and a maximum of 40% in fixed income securities.
The SIAF risk profile is clearly stated as aggressive, so it suits investors who have a high-risk appetite. Funds in SIAF are managed by Stanbic IBTC Asset Management. The minimum investment amount for this mutual fund is N20 million.
2. Stanbic IBTC Nigerian Equity Fund
As we can see the Stanbic IBTC Aggressive Fund is geared towards high net worth individuals. However, Stanbic IBTC offers other mutual funds that almost anybody can invest in. One of such funds is the Stanbic IBTC Nigerian Equity Fund.
Stanbic IBTC Nigerian Equity Fund is an open-ended mutual fund created to provide liquidity while ensuring sustainable attractive returns to investors in the long term. SINEF is biased towards equities and invests a minimum of 70% of its Net Asset value in equities and a maximum of 30% in fixed income securities.
3. Vetiva NewGold ETF
The NewGold Exchange Traded Fund (ETF) is a mutual Fund that tracks the Rand (SA) price of gold and offers investors the opportunity to invest in a listed security that is fully backed by gold bullion. Each NewGold security is equivalent to approximately 1/100 ounces of real gold . The gold is held in a vault by its custodian, Brinks limited.
Gold prices have been up since Covid-19 pandemic struck the world. In times of uncertainty, Gold prices are usually up. Vetiva’s NewGold fund is one of the best mutual funds in Nigeria to invest in based on the high returns it has been giving its customers.
NewGold ETF is traded on the NSE(Nigerian stock exchange).
4. FBN Nigeria Smart Beta Equity
FBN Nigeria Smart Beta Equity Fund is an equity fund that invests money in a portfolio of Nigerian companies. These companies go through a rigorous, research-based and tested evaluation system before investments are made into them.
The FBN Nigeria Smart Beta Equity fund preserves its long term capital by investing at least 75% of its assets excluding cash and cash equivalents in a diversified portfolio of high-quality companies that are listed on the Nigerian Stock Exchange. It also invests up to 25% of its assets in short-term money market instruments and deposits with financial institutions for it to manage liquidity.
FBN Nigeria Smart Beta Equity Fund is an impressive mutual fund that offers competitive returns. If you want to invest in stocks and are not quite sure how to go about it. This mutual fund is a good fit for you.
This fund is suited for an investor with a high-risk appetite with long term goals. The Minimum starting investment for this mutual fund in Nigeria is N50,000.
5. Vantage Balanced Fund
Investment One’s Vantage Balance Fund is a mixed mutual fund focused on Equities, Fixed Income, Money Market and Real Estate assets.
Vantage Balanced Fund is designed to maximise long-term capital growth while maintaining regular income distribution. VBF is one of the mutual funds in Nigeria that suits medium-risk investors as it offers a good mix of investment assets. The minimum subscription for VBF is ₦10,000, you can also make additional investments in multiples of ₦1,000.
6. Legacy USD Bond Fund
FCMB Asset Management’s Legacy USD Bond Fund is a US Dollar-denominated high yield mutual fund registered with the Securities & Exchange Commission. The Legacy USD Bond Fund (LUSBD) can be seen as a US Dollar-denominated Collective Investment Scheme.
LUSBD invests in US Dollar-denominated fixed-income securities. These securities are issued by the Nigerian Government, Supranational bodies and Corporate entities. One of these securities is the Eurobond.
LUSBD ‘s objective is to generate stable income over the long term. If you invest in LUSBD your Capital will not be protected, as the value of your investment may fall as well as rise.
Legacy USD Bond Fund Minimum initial subscription is 5,000 units with a minimum investment period of 6 months USD provides an opportunity for stable income and an excellent means of hedging against potential Naira depreciation.
It provides a convenient way of saving towards medium-to-long-term goals. This Fund has zero currency risk, as inflows and investment of funds are solely in US Dollar. All the dividend income earned on investments are paid in US Dollar.
7. Vantage Dollar Fund
This is another mutual fund from Investment one. This time it is a dollar fund. Vantage Dollar Fund (VDF) is an open-ended Unit Trust Scheme in Nigeria that is registered with the SEC.
VDF invests primarily in Corporate and Sovereign Eurobonds. This mutual fund objective is to provide Interest Income and Capital Appreciation to its investors. VDF seeks to provide investors who are interested in Dollar-denominated securities, access to such securities.
8. VI ETF (Vetiva Industrial ETF)
The Vetiva Industrial ETF also called VETIND ETF is an open-ended ETF that is designed to track the performance of the companies of the NSE Industrial Index.
And to replicate the price and yield performance of the Industrial Index. The NSE Industrial Index comprises the top 10 companies in the Industrial sector listed on the Nigerian Stock Exchange.
The VI ETF is managed by Vetiva Fund Managers Limited. VI ETF holds a portfolio of securities on behalf of its investors that substantially represents all of the component securities of the NSE Industrial Index.
VI ETF is one of the good mutual funds in Nigeria to invest in. Especially for those interested in Nigerian industrial companies.
9. Coronation Fixed Income Fund
The Coronation Fixed Income Fund (CFIF) is a mutual fund in Nigeria that provides you with an opportunity to save for your long term financial needs or any special goals you may also have.
The risk associated with CFIF is low to medium risk. This fund pays out semi-annually.
The Coronation Fixed Income Fund is easily accessible for contributions and withdrawals.
This Coronation Fixed Income Fund invests in a broad portfolio fixed income securities such as government and corporate bonds, treasury bills and other money market securities.
CFIF Asset Allocation Range for the securities are 10% – 80% in Government Bonds, 10% – 75% in Corporate Bonds, 0% – 25% in State, Supranational and Sub-national securities, 0% – 25% in Commercial Papers, Banker’s Acceptance and Other Fixed Income Funds,0% – 25% in Treasury Bills and 0% – 5% in Bank Placements.
10. United Capital Euro Bond Fund
The United Capital Nigerian Eurobond Fund is an open-ended mutual fund that invests in Dollar-denominated Eurobonds floated by the Federal Government of Nigeria and top-tier corporates.
This Fund provides competitive short to medium term capital appreciation for investors on their USD holdings.
The minimum investment in United Capital Euro Bond Fund is $1,000 (10 units) and multiples of 5 units thereafter. This Mutual fund provides much better returns than the average domiciliary deposit account.
The risks associated with investing in this fund are; Credit Risks, macroeconomic instability and interest rate risks. Investing in this mutual fund can provide a good hedge against depreciation of the Naira and long-term capital preservation and growth.
Where To Buy Mutual Funds In Nigeria
1. Through A Mutual Fund Website
Once you’re clear on which fund to invest in, you could invest through the online portal of the Asset Management Company.
2. Through A Registrar & Transfer Agent
Register and Transfer agents act as the mediator between mutual fund houses and investors. Their primary role is to ease the overall process of fund transactions and facilitate better relationships between both parties. They maintain records of investors’ data, account balances, and transactions. R&T agents facilitate online investing in mutual funds. However, your investment is limited to funds that are registered under them. You can check some mutual fund managers in Nigeria.
3. Through Mutual Fund Utilities
Mutual Fund Utilities is a shared platform for various fund houses. Through this platform, you can invest across mutual fund schemes with little or no additional charge. To invest through this portal, you must create a CAN (Common Account Number) first. This is a unique reference number that will map all your existing mutual fund investments across fund houses, giving you a consolidated view of all your investments. You can also check this review on investment one mutual funds.
4. Through An Investment Adviser
There are several considerations when it comes to choosing the right mutual fund to invest in; ensure that you invest based on your risk profile, use the right asset allocation strategy, consider the tax implications, or regularly review your portfolio for any updates. If you’re certain that you can’t do the work involved, then it’s advisable to hire the services of an investment adviser which in recent times has evolved to Robo-advisers. These are online platforms that recommend investments based on complex algorithms and research. They are convenient and easy to use.
5. Through A Mutual Fund App
Most mutual fund houses have mobile applications which you can simply download on your device to manage your investments effectively. The mobile applications give you a personalised experience through which you can invest in suitable mutual fund schemes, view your account statements, buy or sell units, and check other relevant details.
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How To Invest In Mutual Funds In Nigeria
Once you have an account through an online brokerage or investment firm and that account is funded, you’ll need to initiate an order and input key information such as the dollar amount of the investment and the ticker of the mutual fund. Mutual fund purchases are executed once per day after the market closes and it typically takes one to two additional days for the transaction to close.
Wrapping up On Best Performing Mutual Funds in Nigeria
Trading mutual funds online is a relatively recent option for investors. But in choosing a firm to invest with, the criteria are pretty traditional: How reputable is this company? What sort of services, amenities, and products do they provide? How easy are they, and their trading platform, to deal with? And when it comes to picking a mutual fund, the basic questions to ask—how its purpose fits your investment goals, the level of risk it poses vis-à-vis your tolerance, and the size of its fees—remain eternal.
I hope you find this article on Best Performing Mutual Funds in Nigeria helpful