Money market outshines other asset classes in N11bn balanced-fund allocation

Asset managers continued to show preference for money market instruments than other assets classes like equities and fixed income instruments, BusinessDay checks at the Securities and Exchange Commission (SEC) on fund managers monthly investment schedule breakdown show.

Our check on Balanced Funds ,which combine stocks, bond, real estate, and money market components, in a single portfolio ,shows that a larger chunk of funds is still allocated to Money Market instruments as equities reel.

The trend shows a shift away from equities, as volatility in forex market and policy inertia heightened most institutional and foreign investors worries.

“The market euphoria over the new administration has long passed”, said the Gregory Kronsten-led team of Lagos-based FBN Capital research analysts, who also observed that fiscal policy offers the best hope for its positive macro impact.

Charlie Robertson, global chief economist at Moscow-based Renaissance Capital, said “with commodity exporters like Russia, Brazil and South Africa all in recession, or close to it , and Nigeria’s per capita GDP now negative year-on-year (YoY) – there are few relative safe havens around”.

As at July 16, 2015, the Net Asset Value (NAV) of balanced funds under the supervision of the SEC ,rose to N11.1billion from N8.48billion in January 2015. Nigerian equities have lost approximately N1.1trillion year-to-date (ytd).

Recently, research analysts at United Capital plc noted that large isolated institutional buying at the near bottom prices propped up equity prices, “implying the late rally may not be sustainable, as market fundamentals remain week.”

Accordingly, the analysts said they expect a slight improvement in Nigerian equities, adding that “tamer emerging market fund flows, on the back of weak macro outlook will cap equity gains”.

At the bond market, the analysts observed that supply has been much more pronounced in the short and medium tenured bonds; even as there has been steady offshore supply of longer term benchmark instruments.

Balanced funds are designed toward investors who are looking for a mixture of safety, income and modest capital appreciation.

As at July 2015, Women Investment Fund, managed by Chapel Hill Denham Management Limited, allocated 43.10 percent of the N128.458million worth of funds to equities, 7.20 percent to fixed income instruments, while 46.65 percent of the fund was allocated to money market instruments. As at January 2015, the managers of the fund, allocated 44.31 percent to equities, 8.11 percent to fixed income instruments, and 43.65 percent to money market instruments.

In the same period, out of the N1.14billion worth of United Capital Balanced Fund, which is managed by United Capital Asset Management Limited, only   14.99 percent was allocated to equities, 18.20 percent to fixed income instruments, while 66.79 percent of the fund was allocated to money market instruments.

As at January, 16.52 percent of United Capital Balanced Fund was invested in equities, 18.97 percent in fixed income instruments, while 64.48 percent was in money market.

CDL Asset Management Limited invested 41.79 percent of N1.03billion Union Trustees Mixed Fund in equities, 16.75 percent in fixed income instruments, while 36.24 percent of the fund was allocated to money market instruments.

This is against 42.73 percent in equities as at January, 18.02 percent in fixed income instruments, and 33.19percent in money market instruments.

As at July, Chapel Hill Denham Management Limited raise its bet in favour of equities as 59.44 percent of its Nigeria Global Investment Fund was invested in stocks, while 3.14 percent was in fixed income instruments, while 23.32 percent was of the N137.11million fund was invested in money market.  As at January, 62.88 percent of Nigeria Global Investment Fund was in the equities market, 3.32 percent in fixed income instruments, while 33.05 percent was invested in money market instrument.

Also, out of the over N998.7million worth of Stanbic IBTC Balanced Fund, 39percent was invested in equities by the Stanbic IBTC Asset Management Limited, the fund managers to the fund while 3.30 percent was invested in fixed income instruments, while 55.91 percent was allocated to money market instruments. In January, 34.68 percent of the fund was in equities, 2.94 percent in fixed income instruments, while 60.78 percent was invested in money market.

Further check shows that Sterling Capital Market Limited managed Indo Nigeria Unit Trust Fund worth N44.2million invested 13.54 percent in equities, none on fixed income instruments and 86.36 percent in money market. As at January 2015, the fund allocation in equities was 34.12 percent, while 65.56 percent was in money market instruments.

FBN Capital Asset Management Limited managed FBN Heritage Fund worth N4.46billion as at July invested only 29.70percent in equities, 25.69 percent in fixed income, and 44.46 percent in money market instruments. As at January, 29.07 percent of FBN Heritage Fund was in equities, 24.97 percent in fixed income instruments, while 45.84 percent was in money market instruments.

DV Balanced Fund which is managed by Vetiva Fund Managers had 32.62 percent of over N225.8million fund invested in equities, 31.09 percent in fixed income instruments, and 34.24 percent in money market instruments. As at January, 29.02percent of the fund was in equities, 19.78 percent in fixed income instruments, while 50.07 percent was in money market.

Nigeria Energy Sector Fund, which is also managed by Sterling Capital Market Limited, invested 16.09 percent of its N975.6million fund in equities market, none in fixed income, while 83.52 percent was invested in money market. PAC Asset Management Limited invested 99.89 percent of its Pacam Balanced Fund in money market.

continued to show preference for money market instruments than other assets classes like equities and fixed income instruments, BusinessDay checks at the Securities and Exchange Commission (SEC) on fund managers monthly investment schedule breakdown show.

Our check on Balanced Funds ,which combine stocks, bond, real estate, and money market components, in a single portfolio ,shows that a larger chunk of funds is still allocated to Money Market instruments as equities reel.

The trend shows a shift away from equities, as volatility in forex market and policy inertia heightened most institutional and foreign investors worries.

“The market euphoria over the new administration has long passed”, said the Gregory Kronsten-led team of Lagos-based FBN Capital research analysts, who also observed that fiscal policy offers the best hope for its positive macro impact.

Charlie Robertson, global chief economist at Moscow-based Renaissance Capital, said “with commodity exporters like Russia, Brazil and South Africa all in recession, or close to it , and Nigeria’s per capita GDP now negative year-on-year (YoY) – there are few relative safe havens around”.

As at July 16, 2015, the Net Asset Value (NAV) of balanced funds under the supervision of the SEC ,rose to N11.1billion from N8.48billion in January 2015. Nigerian equities have lost approximately N1.1trillion year-to-date (ytd).

Recently, research analysts at United Capital plc noted that large isolated institutional buying at the near bottom prices propped up equity prices, “implying the late rally may not be sustainable, as market fundamentals remain week.”

Accordingly, the analysts said they expect a slight improvement in Nigerian equities, adding that “tamer emerging market fund flows, on the back of weak macro outlook will cap equity gains”.

At the bond market, the analysts observed that supply has been much more pronounced in the short and medium tenured bonds; even as there has been steady offshore supply of longer term benchmark instruments.

Balanced funds are designed toward investors who are looking for a mixture of safety, income and modest capital appreciation.

As at July 2015, Women Investment Fund, managed by Chapel Hill Denham Management Limited, allocated 43.10 percent of the N128.458million worth of funds to equities, 7.20 percent to fixed income instruments, while 46.65 percent of the fund was allocated to money market instruments. As at January 2015, the managers of the fund, allocated 44.31 percent to equities, 8.11 percent to fixed income instruments, and 43.65 percent to money market instruments.

In the same period, out of the N1.14billion worth of United Capital Balanced Fund, which is managed by United Capital Asset Management Limited, only   14.99 percent was allocated to equities, 18.20 percent to fixed income instruments, while 66.79 percent of the fund was allocated to money market instruments.

As at January, 16.52 percent of United Capital Balanced Fund was invested in equities, 18.97 percent in fixed income instruments, while 64.48 percent was in money market.

CDL Asset Management Limited invested 41.79 percent of N1.03billion Union Trustees Mixed Fund in equities, 16.75 percent in fixed income instruments, while 36.24 percent of the fund was allocated to money market instruments.

This is against 42.73 percent in equities as at January, 18.02 percent in fixed income instruments, and 33.19percent in money market instruments.

As at July, Chapel Hill Denham Management Limited raise its bet in favour of equities as 59.44 percent of its Nigeria Global Investment Fund was invested in stocks, while 3.14 percent was in fixed income instruments, while 23.32 percent was of the N137.11million fund was invested in money market.  As at January, 62.88 percent of Nigeria Global Investment Fund was in the equities market, 3.32 percent in fixed income instruments, while 33.05 percent was invested in money market instrument.

Also, out of the over N998.7million worth of Stanbic IBTC Balanced Fund, 39percent was invested in equities by the Stanbic IBTC Asset Management Limited, the fund managers to the fund while 3.30 percent was invested in fixed income instruments, while 55.91 percent was allocated to money market instruments. In January, 34.68 percent of the fund was in equities, 2.94 percent in fixed income instruments, while 60.78 percent was invested in money market.

Further check shows that Sterling Capital Market Limited managed Indo Nigeria Unit Trust Fund worth N44.2million invested 13.54 percent in equities, none on fixed income instruments and 86.36 percent in money market. As at January 2015, the fund allocation in equities was 34.12 percent, while 65.56 percent was in money market instruments.

FBN Capital Asset Management Limited managed FBN Heritage Fund worth N4.46billion as at July invested only 29.70percent in equities, 25.69 percent in fixed income, and 44.46 percent in money market instruments. As at January, 29.07 percent of FBN Heritage Fund was in equities, 24.97 percent in fixed income instruments, while 45.84 percent was in money market instruments.

DV Balanced Fund which is managed by Vetiva Fund Managers had 32.62 percent of over N225.8million fund invested in equities, 31.09 percent in fixed income instruments, and 34.24 percent in money market instruments. As at January, 29.02percent of the fund was in equities, 19.78 percent in fixed income instruments, while 50.07 percent was in money market.

Nigeria Energy Sector Fund, which is also managed by Sterling Capital Market Limited, invested 16.09 percent of its N975.6million fund in equities market, none in fixed income, while 83.52 percent was invested in money market. PAC Asset Management Limited invested 99.89 percent of its Pacam Balanced Fund in money market.

Iheanyi Nwachukwu