• Thursday, March 28, 2024
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Competitive return offerings attract investors to United Capital mutual funds

Competitive return offerings attract investors to United Capital mutual funds

The Nigerian market has witnessed exponential growth in the popularity of Mutual Funds over the past few years, making it the fastest growing asset class. This record growth is driven by investors desire for increased returns as well as to hedge possible risks of having their “eggs in one basket” when they invest in just a particular asset class.

Mutual fund

A Mutual Fund is an investment vehicle made up of a pool of funds collected from numerous investors for the purpose of investing in securities such as stocks, bonds, money market instruments and similar assets.

Mutual Funds are operated by professional fund managers, who invest the fund’s capital and attempt to produce capital gains and income for the investors. These investors may be retail or institutional in nature.

In addition to the Money Market Funds, other Mutual Funds under the regulation of the Securities and Exchange Commission ( SEC) are: Equity- based funds, bond funds, fixed income funds, real estate funds, mixed funds, and ethical funds.

The Net Asset Value ( NAV) of Mutual Funds grew to about N817.2billion as at September 20, according to the Securities and Exchange Commission (SEC) data on fund management and collective investment schemes as at that date. Mutual funds record asset growth is fueled by the 21 Money Market Funds cumula

United Capital Asset Management

The United Capital Asset Management team delivers top- ofthe-line investment management services to its clients, with assets under management currently in excess of N100billion. The asset management team also provides innovative solutions such as Portfolio/fund Management, Mutual Funds, and Investment Advisory services, ultimately helping all their clients to achieve their financial goals.

Read also; Stanbic IBTC, FBN Capital, ARM control 85% total mutual fund AUM

The company which is registered and licensed by the Securities and Exchange Commission (SEC) to act as Investment Advisers, Portfolio and Asset Managers has its expertise across Portfolio/fund Management, Mutual Funds, Wealth Management and Investment Advisory Services.

Looking at its array of mutual funds ( Eurobond fund, Money Market fund) and their competitive return offerings, United Capital Asset Management no doubt contributed to the record growth in Nigerian Mutual Funds market.

United Capital Mutual Funds The United Capital Eurobond Fund is an open ended fund regulated by the Securities and Exchange Commission ( SEC), with a separate Custodian, and Trustees.

Each investor is allocated units based on prevailing price at the date of entry. Dividends are paid annually. Dividends are a portion of interest earned on the fund per time. The fund accrues interest daily, so appreciation in the invested amount can be redeemed at any time.

The Money Market fund which earned the fund manager Businessday money market fund manager of the year 2018 comes with key benefits such as low entry thresholds, quarterly dividends, tax-free returns, 24-hour redemption, and guaranteed principal investment.

The fund’s consistent and timely dividend payments, strong growth in asset under management ( AUM) and strong credit rating had earned it the award. Nairametrics also rated the United Capital money market fund as a top high-yield money market fund that beats inflation in Nigeria.

Fund manager’s comments Speaking on the Mutual funds, Sunny Anene, Group Executive Director, United Capital Plc said: “Our Asset Management business continues to record significant growth in Funds Under Management (FUM).

“Our Eurobond Fund, a dollar denominated mutual fund, has grown by over 255percent since the beginning of the year from $ 8million to $ 30million. Currently at 8percent per annum, return on the Fund has also beaten industry benchmarks and peer averages.”

“Our Money Market Fund also continues to grow. The Fund size has grown by over 480percent within the same period while the return remains competitive at 12.6percent per annum as at date, above short-term treasury bill and inflation rates”, he added.

“Aside our competitive returns which continue to endear investors to these funds, our focus on partnerships with key institutional and retail outlets are major drivers of growth.

“With our Money Market Fund, investors can gain exposures to a diversified portfolio comprising high quality money market instruments like treasury bills and certificates, commercial papers and bankers’ acceptance. The Fund provides liquidity, capital preservation, and high returns. Investors’ capital investment is guaranteed compared to a direct exposure to Treasury bills where principal investment may decline or increase if the bills are not held to maturity. Our Money Market Fund thus preserves capital, while offering quarterly interest payments, safety of funds, and liquidity,” he stated further.

Anene added that, “The Eurobond Fund is invested in Dollar denominated Eurobonds, floated by the Federal Government of Nigeria, as well as top-tier corporates. Subscribers can expect to receive competitive short to medium term capital appreciation on their USD holdings invested in the Fund much better than they would receive on domiciliary deposits. The minimum investment is $1,000 and multiples of $500 thereafter”.

According to the Group Executive Director, “our consistent performance above market benchmarks can be attributed to active management of our portfolios supported by rigorous investment research.

“Our highly experienced portfolio management team continues to seek opportunities to improve returns despite the tough operating environment. We have set our internal benchmarks much higher than market averages and we continually mandate our portfolio managers to deliver highly competitive returns (within SEC approved Trust Deed) to the delight of our clients.”

“We are also mindful of the risks in the operating environment ; as such, we have instituted a robust risk management framework to guide investments in these funds. Our Money Market Fund is A-rated by Agusto & Co”, he stated.