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Leading Mutual Funds in Nigeria by reporting and transparency

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Mutual funds in Nigeria have grown in leaps and bounds, as the NAV Summary Report from the Securities and Exchange Commission, (SEC) obtained a few weeks ago revealed that there are 106 mutual funds in the country with a total asset value of N1.33 trillion.

What is the extent of its Transparency: Transparency is the state of being easily detected or seen through, easily and readily understood  by the investing public i.e the ability of the investor to look through his investment portfolio report or fact sheet and be able to see what the investment manager is doing with his money.

Why it matters to investors: Investors would like to monitor their investment performance, the risks involved as well as what their money is being invested in. In addition, investors would like to know how much they pay by way of fees. Transparency makes that information known.

To the fund managers, transparency is key to mutual fund activities.  Fund managers operate in a competitive market environment and transparency gives them a competitive advantage. A fund manager that discloses information readily, timely, and voluntarily stands to attract investment contributions from investors. It helps to make communication with investors clearer and timely.

Where they stand:

Stanbic IBTC Asset Management Company:

Daily Prices: Stanbic IBTC Asset Management Company has been at the forefront of mutual fund reporting transparency in Nigeria. It has daily fund prices for the 14 funds it manages updated daily on its website and sent to you upon request. Not only are the prices readily available daily, but they are also available on a historical (inception to date) basis.

Factsheets: Prior to 2019, Stanbic IBTC Asset Management Company used to have a monthly fact sheet for each of their funds, but that got changed to a consolidated quarterly report. The quarterly report is released on a timely basis. The beauty of that report is that it tells the investor the risk profile of each fund, the expense ratio, asset allocation by sector, top 3 stock holdings (which is grossly inadequate disclosure) as well as current fund performance juxtaposed with 3- and 5-year performance data. The fact sheet also shows the investor the performance of the benchmark index for each fund.  Other information contained in the fact sheet includes fund size, NAV, initial and subsequent investments as well as fund objectives. The Q1 2020 factsheets are currently on the website.

Annual Financial Reports: In addition to the rendition of the fact sheets as noted above, Stanbic IBTC Asset Management publishes the audited financial statements of all the funds under its management. Although that of 2019 has not been published, that of 2018 has been published.

Vetiva Asset Management Company:

Daily Prices: Vetiva Asset Management Company is the second most transparent fund manager in Nigeria. The daily fund prices are readily available although some times it looks like only the dates change without the actual prices changing. This may have to do with the valuation frequency of the funds.

Factsheets: Vetiva Asset Management Company has a monthly factsheet for its funds. The fact sheet contains most of the information that investors require. It beats Stanbic IBTC as it reports the top 10 holdings, which is better than Stanbic’s 3 top holdings. Like Stanbic, Vetiva Asset Management Company reports the risk profile of its funds but not all, and also reports the gross expense ratio. In addition, it lets investors see the funds’ MTD, QTD, YTD, ITD performance in juxtaposition with the relevant benchmarks. The factsheets used to be timely but as at the time of writing, the latest available is for the end of March 2020, it is likely they fund manager may be changing to quarterly reporting like Stanbic IBTC. Other pertinent information on the fact sheet includes dividend history, NAV, Bloomberg identifier, and lots more.

Lotus Capital Asset Management Company:

Daily Prices: Lotus Capital Asset Management comes next in line on transparency in mutual fund reporting. The fund manager publishes daily mutual fund prices but unlike Stanbic and like Vetiva, historical prices are not readily available. In that case, the prices are available on a get it or lose it basis.

Fact Sheets: Lotus Capital Asset Management publishes its factsheets on a quarterly basis and has published Q1 2020 edition for each of its funds. Though it does not show expense ratio, it shows the management and incentive fee percentages as well as a description of the risk profile of the fund. In terms of returns, the factsheet shows the QTD, YTD and ITD returns. It does show 5 top stock holdings as well as asset allocation by sector.

Annual Financial Reports: In addition to the fact sheets being available quarterly, Lotus Capital Asset Management publishes the audited financial statements of all the funds under its management. And the 2019 audited financial statement has been put on the platform.


Quantum Zenith Asset Management Company:

Daily Prices: Quantum Zenith Asset Management Company has made a lot of changes to its reporting and by so doing has become one of the most transparent in mutual fund reporting. Daily prices are readily available as well as historical prices in a downloadable form.

Factsheets: Quantum Zenith Asset management Company has the funds’ factsheets tucked away on the website The fund manager will be better off making it easier for investors to find the factsheets as its presence is not very evident from the home page.  The fact sheet has most of the required information including top 5 holdings. The beauty of the performance presentation is that it shows whether the fund is out or under perfuming the relevant index and by how much. Information on expense ratio is not provided except for the management fee rate.


United Capital Asset Management Company:

Daily Prices: United Capital Asset Management Company would probably have ranked the first or second fund manager if not for the lack of daily prices. On its web site, the last daily price is dated June 14th, 2019. However, I have been receiving the weekly prices upon request and investors can too.

Factsheets: United Capital Asset Mgt. Ltd publishes a monthly fact sheet, the latest being for the month of May 2020. The factsheet shows the risk profile of the fund, the total expense ratio, as well as MTD and YTD return numbers put side by side with that of the benchmark in addition to a 5-year performance summary.  Unfortunately, it does not contain information on what the funds are invested in but it shows the allocation by asset type.

Others

FSDH is another fund manager that practices or is cognizant of the importance of transparency in fund reporting. The fund manager reports daily prices which can also be downloaded on a historical basis. It also publishes fact sheets. Regrettably, FSDH has been slacking on the timeliness of the fact sheets as the last published ones are for Q4 2019 

FCMB Asset Management is yet another reporting transparency conscious fund. The fund manager ensures that the fund prices are on their website daily. They used to let investors have the funds’ fact sheets but that has stopped as the last one posted was for December 2018

Other Fund Managers:  There are other fund managers that are transparent with regard to daily fund prices like ARM Asset Management, Afrinvest, Chapelhill, FBN, FCMB, and Meristem but the lack of factsheets pushed them out of contention.

In all, the fund industry has come a long way in Nigeria and it continues to evolve, as the regulators tie all the loose ends and fund managers begin to leverage off of the advantages from transparency, my hope is that mutual fund reporting will improve and the investors will be the happier for it.

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President Buhari suspends Twitter operations in Nigeria

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Federal Government has reportedly suspended, indefinitely, the operations of Twitter, the microblogging and social networking service, in Nigeria.

This was disclosed by the Minister of Information and Culture, Alhaji Lai Mohammed, via a statement issued by the Ministry’s spokesperson, Segun Adeyemi on Friday.

The Minister cited the persistent use of the platform for activities that are capable of undermining Nigeria’s corporate existence.

“The Federal Government has also directed the National Broadcasting Commission (NBC) to immediately commence the process of licensing all OTT and social media operations in Nigeria,” the statement read.

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Nigeria signs MoU with Niger Republic on petroleum products transportation, storage

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The Federal Government has signed a Memorandum of Understanding (MoU) with Niger Republic on the transportation and storage of petroleum products.

This was disclosed by the Ministry of Petroleum Resources via its Twitter handle on Thursday.

It tweeted, “Nigeria, Niger Republic Sign MoU on Petroleum Products Transportation, Storage. NNPC Pledges to Support SONIDEP on Capacity Building.”

The MoU was signed by the GMD NNPC, Mallam Mele Kyari and the Director General of SONIDEP, Mr. Alio Toune under the supervision of the two countries’ Ministers of State for Petroleum, Çhief Timipre Sylva and Mr. Foumakoye Gado, respectively with the Secretary General of the African Petroleum Producers Organisation (APPO), Dr. Omar Farouk Ibrahim in attendance.

Sylva explained that the development is another huge step in developing trade relations between both countries.

He said, “This is a major step forward. Niger Republic has some excess products which needs to be evacuated. Nigeria has the market for these products. Therefore, this is going to be a win-win relation for both countries.”

What you should know

Following bilateral agreements between Nigeria’s President Muhammadu Buhari and President Mahamadou Issoufou, talks have been on-going between two countries for over four months – through the Nigerian National Petroleum Corporation and Niger Republic’s National Oil Company, Societe Nigerienne De Petrole (SONIDEP), on petroleum products transportation and storage.

Niger Republic’s Soraz Refinery in Zinder, some 260km from the Nigerian border, has an installed refining capacity of 20,000 barrels per day. Niger’s total domestic requirement is about 5,000bpd, thus leaving a huge surplus of about 15,000 bpd, mostly for export.

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House of Reps to support full aviation reform

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The House of Representatives has promised to support total reforms in the aviation industry through legislation, as it appeals for active participation of stakeholders in public hearings.

This was disclosed by the Speaker of the House of Representatives, Femi Gbajabiamila, via his Twitter handle on Tuesday.

According to him, the House has identified that the aviation industry is a key contributor to the growth of the country’s economy and through legislation it would do all it can to develop the industry.

During the opening of a 3-day public hearing session on six aviation-sector bills by the Committee on Aviation, he explained that the draft legislation would make the sector more effective and efficient.

He said, “It is imperative to note that the development of our aviation industry is an added advantage to the growth of our economy. It is in this vein that the House of Representatives will continue to support total rehabilitation and upgrading of our airports and allied services.

“The consideration of these Bills during this Public Hearing is a testament to our commitment to give new life to the aviation sector and make our airports to be a better non-oil revenue-generating sector as is witnessed in other advanced economies.”

The Speaker appealed to the public and interested parties to honour invitations to House committee public hearings so that they can share ideas on how to make critical sectors deliver optimally.

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