For many investors, it is not always easy to decide what Mutual Fund to buy. Meanwhile, what is a Mutual Fund? These are collective/pooled investment vehicles that allow you (an investor) with limited resources to own a diversified investment portfolio managed by a seasoned investment manager.
There are several SEC regulated mutual funds dedicated to investing in various asset classes. Most of them with different investment objectives include real estate funds, fixed income funds, equity funds, money market funds etc.
Just recently, the Nigerian capital market welcomed more Mutual Funds, when within its first year of operation; Coronation Asset Management a subsidiary of Coronation Merchant Bank Limited listed three mutual funds on the Nigerian Stock Exchange (NSE) for trading and accessibility by retail and institutional investors.
The three listed funds are Coronation Money Market Fund; Coronation Fixed Income Fund and Coronation Balanced Fund. Their Initial Public Offering (IPO) was done from July 10, 2017 to July 28, 2017.
Abubakar Jimoh, chairman, Coronation Asset Management and Managing Director, Coronation Merchant Bank Group had described the funds-listing as “yet another milestone in the history of our company and validation of our expertise in asset management.”
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He said: “By listing the N2.168billion raised from the three funds on the stock exchange, we are demonstrating to our investors that we are determined and committed to offer better prospects on their investments across all market conditions”
Mutual Fund investors want active engagement, efficient management of their funds, and quality reporting of Mutual Fund performance –all these Coronation Asset Management said it got answers to.
In its value propositions to investors of these Mutual Funds, Coronation Asset Management said; “We have developed a technology base that supports efficient and seamless service, as well as promote transparent and real time reporting of portfolio holding and performances. We believe in building a sustainable relationship based on trust with our clients by ensuring we deliver on our promise of achieving their financial goals as well as committing to quality and excellent service,”
They recommend investing in the Mutual Fund which fits best with investor’s long term savings goal and tolerance for risk. For example, the asset managers would recommend an investment in the Money Market Fund to an investor who has a short-term investment requirement and is also apprehensive towards taking risk.
While 479 subscribers pooled N1.654billion through the Coronation Money Market fund, Coronation Fixed Income had 39 subscribers and yielded N315.205million; and Coronation Balanced Fund with 64 subscribers achieved N198.615million.
“These funds will guarantee investors’ competitive yields as the business has put together a strong investment management team who will be guided by an investment committee with over 50years combined experience to ensure the funds deliver on the expectations of investors,” said Aigbovbioise Aig-Imoukhuede, a director in Coronation Asset Management.
He added that “while the Coronation Money Market Fund offers investors the opportunity to maximize return on their liquid savings, the Coronation Fixed Income and Balanced Funds provide the best opportunity to realize medium to long term investment goals.”
The funds offer all categories of investors, three viable options in line with domestic economic and financial market conditions, an opportunity to diversify their investment portfolios while relying on the experience and performance track record of the Coronation Brand to ensure their investments attain its required financial outcome.
The funds and their investment objectives
Coronation Money Market Fund: The aim of the Money Market Fund is to provide for preservation of capital and moderate income, and will make regular income payment on a quarterly basis. The fund will invest in safe short-term instruments such as Treasury Bills, Certificates of Deposit, Commercial Paper (CP) and Inter-Bank Call Money, and will be optimally managed to generate competitive returns in line with the interest rates prevailing in the market. The return benchmark is to outperform the average yield of the 90days Treasury Bills. This fund is ideal for short term focused investors. Interestingly, Coronation Money Market Fund provides group personal accident insurance cover for investments above N100,000.
Coronation Fixed Income Fund: The aim of the Fixed Income Funds is to provide regular and steady income which is payable on a semi-annual basis. The fund will invest in a diverse pool of fixed income securities such as FGN bonds, State Bonds, Sub-national Bonds, Corporate Bonds, and Money Market securities. Though capital appreciation in the fixed income funds may be limited, the risks are typically lower than that of equity biased funds. The fund is more suitable for investors looking to invest for the medium to long term. The return benchmark is to outperform the average return of the FMDQ bond index. This fund is ideal for medium to long-term focused investors.
Coronation Balanced Fund: The aim of the Balanced Funds is to achieve capital appreciation over time while mitigating volatility associated with investments in equities by investing in fixed income securities. The fund will provide a combination of income and moderate growth by investing in a diverse pool of equities, and fixed income securities such as FGN bonds, State Bonds, Sub-national Bonds, Corporate Bonds, and money market securities. The fund is more suitable for investors looking to invest for the longer term. The return benchmark is to outperform the composite average return of the 90-day Treasury Bill and Nigeria Stock Exchange 30 Index. This fund is ideal for medium-term focused investors with a relatively higher appetite for risk.
Take the Coronation Mutual Funds advantage
In addition to maintaining a mandate to deliver excellent and efficient services under an ever changing economic environment, Coronation Asset Management has a diverse team of experienced investment managers, who create innovative financial solutions which are easily accessible to investors.
Target Investors: Coronation Mutual Funds are suitable for individual and institutional investors seeking to invest for capital preservation, capital gains and regular income, regardless of your investment time horizon as the funds provide immediate liquidity to fund cash requirements.
About the asset managers: Coronation Asset Management is a subsidiary of Coronation Merchant Bank Group. The firm provides investment solutions to help their clients achieve their financial goals. Target clients include retail and high net worth individuals, corporations, state or federal government entities, insurance companies, amongst others. Coronation Merchant Bank, the parent company of Coronation Asset Management, is an emerging merchant banking franchise with industry leading financial stability indicators and an “A+” rating from Agusto & Co. The credit rating is a valid testament to the bank’s strong capitalisation, good liquidity profile and robust risk management framework evidenced by the zero NPL ratio as at December 2016.
The banking group was established to fill the gap in a long-underserved market segment, seeking to address the need for long term capital across key sectors of the economy. The Group offers investment and corporate banking, private banking/wealth management and global markets/treasury services to its diverse clients. It also offers securities trading/brokerage, asset management and trustees services via its subsidiaries; Coronation Securities Limited, Coronation Asset Management Limited respectively.
Driven by its vision of becoming Africa’s premier investment Bank and with an asset base of over N100billion, the Banking group is certain to leverage its privileged direction by some of Nigeria’s individuals who excelled and rose to the top of merchant banking sector at its height of excellence to become the industry model for risk management, corporate governance and responsible business practices. Coronation Merchant Bank’s quest for industry distinction is evident in its corporate identity which has been designed to communicate the Group’s vision, ambition and inner strength
How to invest in the Coronation Mutual Funds Offer
The asset managers have created a seamless and easy process for investments in the Coronation Mutual Funds by domestic and foreign investors, through the development of online and in-person channels for investment requests. Investment requests can either be completed on its website www.coronationam.com or investment requests and payments can be done in person at any Access Bank branch nationwide.
Minimum amount to invest
To ensure the Coronation Mutual Funds are also easily accessible by every investor, the asset managers placed the minimum investment into the fund at N10,000 with additional multiples of N5,000 thereafter.
How to redeem investments from the Coronation Mutual Funds
The asset managers’ redemption process is in line with their mandate to deliver excellent and efficient services to investors. Domestic and Foreign investors can initiate redemption requests through the same channels as investment requests, and payments are expected to be completed within five business days of the receipt of the Redemption notice.
Minimum balance available following redemption
The Coronation Mutual Funds allows investors to withdraw all funds as they see fit, however, there are different minimum balances required across the funds to ensure the investor continues to receive interest on their balance.
Summary
Aside that your money is managed by fund managers with global exposure and experience, across the various asset classes, the asset managers diligently focus on always creating value for investors in line with their promised investment objectives.
Open-ended mutual funds are priced daily and fund managers are always willing to buy back units from investors. This means that investors can sell their holdings in mutual fund investments at any time and not worry about finding a buyer at the right price. Investors can get access to their funds within 48 hours.
In managing your investments efficiently, Coronation Asset Management targets the best execution price when dealing with counterparties and brokers. They are able to leverage the benefit of investing large funds which have been pooled together from many investors. Their investments are designed to limit loss to capital through proper and efficient diversification of Coronation Mutual funds investment portfolios. The asset manager aims to reduce the volatility of returns by investing in a number of companies across a broad group of sectors. Hence, investor irrespective of the size of the investments can enjoy the benefits diversification brings in minimizing any potential loss to the investments.
The asset managers operate a system where all information regarding their investments and performance are readily and easily accessible to their investors. While daily prices of their funds are available on various platforms reports on investor’s holding and valuation can be obtained through their online account.
Iheanyi Nwachukwu
