Suppose at the start of 2019 you bought created an equity portfolio worth N1 million which replicates the main equity gauge of the Nigeria Stock Exchange (NSE); having all the listed stocks in the same weighting as the All Share Index, by how much would your investment have grown?
Not at all! You would have a capital loss of N119,950.72 as at Thursday and considering inflation at currently around 11.08 percent the performance is not so good.
On the upside, some stocks would have paid you dividend by that time; in fact a big lender should have your week with an interim dividend credit alert.
It should be noted that while the stock market has been bearish, a number of stocks hold opportunities for savvy investors.
There are a number of stocks that have gained more than 20 percent so far in the year underscoring the importance of the stocks you pick and their relative weighting in your portfolio.
Also the price of some fundamentally sound stocks have never been cheaper and provide opportunities for investors.
Oil (+14.59%)
It started as a sleek year for oil which gained up to 39 percent by April but everything got slippery as a mix of supply and demand factors including the Trade war between US and China weighed on Brent performance.
Brent, the benchmark crude, so far in the year has gained 14.59 percent to around $61.65 on the ICE Futures Europe around 18:19 GMT+1 Friday.
There are trading platforms in Nigeria to bet on or against this liquid gold.
Mutual Fund (-3.29%)
A mutual fund is a professionally managed investment vehicle that pools money from many investors to purchase securities. The fund can be invested in securities in an asset class or an array of instruments in a way meets investors’ goal to grow or preserve wealth.
There are different kind of funds and different fund managers in Nigeria. On the average across all fund types mutual fund is down -3.29 percent as of August 16, the latest information available on Securities and Exchange Commission (SEC) website.
Equity based funds are down 26.96 percent, Money market funds are down 10.01 percent, Fixed Income funds are down 7.12 percent, Real Estate funds have pared 8.74 percent, Mixed fund have dipped 1.24 percent, and Ethical funds are down 10.58 percent. On the other hand, Bonds funds are up 23.67 percent.
Exchange Traded Funds (+6.30%)
An exchange-traded fund is an investment fund traded on stock exchanges, much like stocks. Similar to mutual fund, ETF is a hybrid investment vehicle with features of an index fund and a mutual fund.
According to latest information form SEC ETFs have gained 6.30 percent year-long.
Specialist Funds (+1.13%)
A Specialist Fund is a fund designed for highly specialised investment entities that wish to target institutional, professional, professionally advised and knowledgeable investors.
Chapel Hill Denham Nigeria Infrastructure Debt Fund (NIDF) is the only mentioned Specialist Fund in SEC’s report.
The fund has gained 1.13 percent so far in 2019 according to the SEC data for six months to week ended august 16.
Gold (+18.1%)
Jitters on the back of rising global uncertainties have sent investors packing from risky assets into safe havens like gold, stoking price of the yellow metal to the highest levels in more than 5 years.
Gold has gained 18.1 percent trading at 1,514.67 USD in the spot market as at 18:00 GMT+1 Friday.
Goldman Sachs and Citigroup, US-based Investment Banks, say there is a possibility for the precious metal reaching $1,600 with the latter estimating the advancement within 6 months, at least.
Bank of America Merrill Lynch, on the other hand, expects bullion price to near $2,000 within two years, beating the all-time high of $1,921.17 established in 2011.
Bitcoin(+192.87%)
Bitcoin opened for the year around 3,715.56 USD per unit of the cryptocurrency but has surged some 192.87 percent to 10,729.81 USD per unit as of 18:00 GMT+1 Friday.
The coin has gained the most among asset classes reaching as high as USD 12,500 near mid-June.
Currency (USD +0.7%)
If you did not bet on the dollar against the naira at the start of the year you haven’t missed much.
The naira has gained on the green back by 0.70 percent given its current price of N360.06/$ as at GMT+13:53 on Friday, according to data from Bloomberg.
This is not saying that hedging against exchange rate movement is a bad idea. Earlier this month dollar was priced at N365.52/$, the highest year-long.
