Futureview offers investment tips to hedge against inflation

Amid increasing fears that Nigeria may face higher inflationary pressure following the federal government’s retention of subsidy on petroleum products, the Managing Director, Futureview Asset Management, Ughochi Nnodi has offered investment tips for building an efficient portfolio.

Nnodi explained that investors could optimize the tough operating environment by investing in assets that hedge against inflation. According to her, there are resilient sectors that outperform inflation and generate alpha returns. She noted that investors should take advantage of sectors such as commodities, financials, healthcare, consumer staples, energy, technology and real estate to build a balanced portfolio.

After- eight months of steady deceleration in headline inflation, there was a marginal spike in the December 2021 rate from 15.4percent in November 2021 to 15.63percent in December 2021. The current increase in headline inflation which is attributed to currency depreciation and the liquidity challenges in the forex market no doubt impacts negatively on all investment outlets.

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“There are resilient stocks that thrive during inflation because of their underlying assets. Investors should build their portfolios with stocks of companies in the healthcare, energy, commodities, consumer staples, financials and real estate among others as a risk and reward trade-off. We should not lose sight of mutual funds which is a collection of investments in different asset classes.

“At Futureview, we design financial products to meet the demand of our array of customers with diverse investment objectives and risk tolerance. For instance, we have a product that targets Nigerians in diaspora. It is called Futureview Dollar Fund. We floated it along with Futureview Equity Fund. The two financial instruments hedge investment against inflation while they provide regular income.

“ It is settled in portfolio management that during high inflation rate, mutual funds provide an opportunities for diversification at every dollar level, sharing of investment expenses, economies of scale and operational efficiencies, ease of investing in specialized market sectors and investment tracking, simple portfolio management, access to professional money managers and low trading costs,” said Nnodi.

Iheanyi Nwachukwu

Iheanyi Nwachukwu, is a creative content writer with almost two decades journalism experience writing on banking, finance, capital markets, and tax. The multiple awards winning journalist is Assistant Editor, BusinessDay. Iheanyi holds BSc Degree in Economics from Imo State University; Master of Science (MSc) Degree in Management from University of Lagos. Iheanyi has attended several work-related trainings including (i) Advanced Writing and Reporting Skills (Pan African University, Lagos); (ii) News Agency Journalism (Indian Institute of Mass Communication {IIMC}, New Delhi, India); and (iii) Capital Markets Development and Regulations (International Law Institute {ILI} of Georgetown University, Washington DC, USA). Other trainings Iheanyi attended include: Economic/Political Risk Analysis (By Thomson Reuters Foundation); International Financial Journalism (IFJ) (By PMA Media Training, UK); Effective Business Writing Skills (By Phillips Consulting); Reporting on Corporate Governance (By International Finance Corporation (IFC) & Thomson Reuters Foundation UK); etc. In addition, he has participated in high-level economy & markets events in Dubai, South Africa, Morocco, and other African countries like Zambia, Ghana and Gambia.