Trends in Mutual funds investing: August 2014



Monday September 8, 2014/Uche Ndimele, Funds & Valuation Expert

The combined assets of mutual funds in Nigeria decreased by N1.5billion, or 1.34 percent, to N185.5 billion in August, according to data released by the Nigerian Security and Exchange Commission (SEC) for the week ending August 29th 2014.

According to the same source, the total assets had stood at N188 billion as at July 25th 2014. When further analyzed, the data shows that mutual fund investors injected an estimated N3.8billion into various funds and withdrew an estimated N5.3 billion from their mutual fund investments in the month of August.

The financial highlights indicate that Equity Based Funds, Bond Funds, Real Estate Funds and Ethical Funds had estimated net outflows of N478 million, N807K, N2.3 billion and N97.9 million respectively within the period under review.


On the other hand, Money Market Funds, Balanced Base Funds, Umbrella Funds, Sector Funds and Exchange Traded Funds all posted inflows of various amounts. Going from N45 billion on July 25th to N43.6 billion on August 29th, the total assets of Equity based funds decreased by 3.1% while Real Estate Funds reduced by 4.9%.

Inspite of the net inflow witnessed by Balanced Based Funds and Exchange Traded Funds, the total assets of these funds decreased by 1.3 and 2.1 percentage points respectively. While .79% of the decrease in total assets of Nigerian mutual funds in August is due to capital flow, .56% of the reduction is attributable to performance. Performance wise, all the sectors of the funds made losses except for Real Estate and Umbrella Funds that recorded total gains of 0.32 and 0.83 percent respectively. The poor performance was not unexpected based on the bearish mood that characterized the market for a greater part of August.

At the end of the day, however, the proportionate sectoral allocation of the mutual funds remains almost intact with no major changes as can be seen from the pie charts.


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