• Thursday, March 28, 2024
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Equity, Mixed, Ethical Funds underperform as total NAV rises 31.5% YTD

BPP boosts public funds expenditure with procurement officers’ training

It has been an impressive year for fund managers who have grown Net Asset Value (NAV) by more than a quarter since the start of 2019 but three fund types are missing in the action-equity fund, mixed fund and ethical fund.

 

The Net Asset Value of total mutual funds in Nigeria was N817.25 billion as at September 26, latest data from the Securities and Exchange Commission (SEC) shows.

 

That is 31.5 percent more than it opened for the year.

 

While bond funds and fixed income funds have been stellar with the growth of NAV up to 72.5 percent and 70.7 percent respectively, ethical fund has performed worst with a decline of 14.2 percent in NAV.

 

NAV of equity-based funds have declined by 12.1 percent and mixed funds have dipped 3.9 percent while money market fund is up 31.4 percent and real estate funds have grown by 4.8 percent.

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To calculate a Collective Investment scheme Net Asset Value or NAV, the value of the total assets of the fund is subtracted by its liabilities, this amount is then divided by the total number of shares in the fund to give the unit price.

 

The impressive growth that was seen in the fixed income-based, bonds funds and money market funds reflect impressive returns in the debt market following moves by the Central Bank of Nigeria to stabilize the Naira by offering attractive rates on government securities as a way to lure hot money into the economy, experts say.

 

On the other hand, the downward trend seen in NAV of equity-based funds is on the back of pessimism that has weighed on stock performance year-long.

 

Analysts expect the equity market which has declined 14.14 percent to remain bearish in the mid-term given tepid growth of the economy which has impacted companies’ performance.