Thursday, May 3, 2018 9:00AM / Quantitative Financial Analytics Ltd
Nigeria’s equity market witnessed some calmness and subdued volatility in the first quarter of the year. Quantitative Financial Analytics Realized Volatility index (NSErealVol) stood at 12.98, as at March 29th, down from 15.68 recorded by the end of the previous year. In addition, inflation in Nigeria moderated while the Dollar exchange rate stabilized around the N360 range within the quarter even as yields continued to fall along all maturities. All those had some positive effect on equity market which got translated into the equity mutual funds.
How Equity Mutual Funds Perform in Q1?
During Q1, 2018, the NSE ASI increased by 3,261.32 points representing a positive performance of 8.53%. The market grew by 15% in Jan, 2018, losing marginally by 2% and 4% in February and March to end the quarter with a positive return. Inspite of the market performance within the quarter, we have identified 4 mutual funds that did much better in the quarter. Here they are:
Meristem Equity Market fund seeks capital appreciation for the long run by investing in a basket of high quality equity securities in Nigeria. The fund gained about N95m or 46% in 2017 and has gained about 52.7m or 17% in Q1, 2018, according to our analysts. In Q1, 2018, it attracted an estimated 8.5m of inflows to leave its net asset value at N364 million by the end of the first quarter.
Stanbic IBTC Aggressive fund seeks to provide liquidity whilst maintaining low to medium volatility of return over the long-run. The fund invests a minimum of 60% of its assets in the equity market and the other 40% in fixed income market according to its fact sheet. Stanbic IBTC Aggressive fund gained about N95m or 48% in 2017 and has gained about N43.6m or 12.58% in Q1, 2018, according to our analysts. In 2017, it suffered a net outflow of about N10m but in Q1, 2018, it attracted an estimated N169m of inflows to leave its net asset value at N502 million by the end of the first quarter.
The Frontier Fund has the primary objective of achieving long-term capital appreciation to unit holders by investing in carefully selected money and capital market instruments.
The Fund gained about N42m or 22% in 2017 and has gained about N27m or 10.55% in Q1, 2018, according to our analysts. In 2017, it suffered a net outflow of about N3m but has attracted net inflow of N5m in Q1, 2018 to leave its net asset value at N286 million by the end of the first quarter.
The United Capital Equity Fund Invests in quoted equities that are traded on the Floor of the Nigerian Stock Exchange (NSE). Its objective is to achieve high returns over a medium to long-term period by investing in select portfolio of equity securities according to its fact sheet.
The Fund which is suitable for investors with a long-term outlook gained about N420m or 45.8% in 2017 and has gained about N145m or 10.45% in Q1, 2018, according to our analysts. In 2017, it suffered a net outflow of about N122m and has also suffered about N15m net outflow in Q1, 2018 to leave its net asset value at N1.5 billion by the end of the first quarter.
Though these funds have been stellar in their performance, it is worthy of note to state that past performance is not a guarantee of future performance.