There are many mutual funds and mutual fund companies in Nigeria which could Earn You Decent Money here in Nigeria if you know about them and how to invest in them. A great earning method for passive investors, Mutual Funds in Nigeria are investments schemes that are under the control of an AMC, an Asset Management Company. They provide regular investors with the opportunity to earn from investing in securities, stocks, and bonds.
For a detailed information on how mutual funds works and how mutual funds works in Nigeria, please check this guide.
Nigeria owns a total of 107 Mutual funds, as seen from the Security and Exchange Commission’s data. Below is the analysis of the various available Fund types, as compiled by the Security and Exchange Commission (SEC).
- BOND FUNDS (9)
- EQUITY BASED FUNDS (13)
- ETHICAL FUNDS (6)
- EXCHANGE TRADED FUNDS (10)
- FIXED INCOME FUNDS (21)
- INFRASTRUCTURE FUND (1)
- MIXED FUNDS (21)
- MONEY MARKET FUNDS (23)
- REAL ESTATE FUNDS (3)
TOTAL = 107
We located the Funds with the best performance by comparing the Fund prices of the last business day in December 2019, to that of July 2020. And with that we were able to bring out the top 5. We also visited the websites of the Funds to extract their profiles to add to our analysis.
9 Best Mutual Funds in Nigeria That Will Make You Good Money
The list below comprises some of the various available Fund types listed on the Security and Exchange Commission (SEC):
(1) New Gold ETF
The New Gold ETF, or New Gold Exchange Traded Fund is an Exchange Traded Fund that is owned by Vetiva. In December 2011, the New Gold ETF was listed on the Nigerian Stock Exchange (NSE). This business works by tracking the rise and fall of the price at which gold is being sold, and thus, creates an opportunity for retail, and institutional investors to invest in a debenture that has the support of a gold bullion. Each piece of New Gold security has an equivalence of 1/100 ounces similar to that of the gold bullion that is held in the gold bullion secure stockpile. Each gold is secured in the form of the London Gold Delivery Bars, and they are kept according to the Good Delivery Standards issued by the LBMA.
Fund Price – N5,220
Fund Price – N8,000
Return – 53.3%
Ranking – First
Note: The advent of the Covid-19 pandemic has led to an upsurge in the price of gold. Gold prices have been noted to rise during periods of market uncertainty, and this has led investors to be unable to take any tangible standpoints. So if you need something to invest in during periods of uncertainty, then this is your best bet.
(2) The Nigerian Smart Beta Equity Fund from the FBN
Owned by the FBN, The Nigerian Smart Beta Equity Fund invests its money in a variety of specifically chosen Nigerian Companies, selected by an evaluation system that is well-tested, rigorous, and research-based.
75% of the assets provided by the Fund is invested in a variety of specifically chosen high-brow companies on the Nigerian Stock Exchange. This in turn serves as a long-term capital preservation method. 25% of the Funds are invested on a short-term basis as deposits in both money making instruments, and financial institutions. And this is done to help manage liquidity.
Fund Price – N129.17
Fund Price – N197.29
Return – 52.7%
Ranking – Second
Note: The capabilities of this Fund is very impressive, when you compare it to the fact that it is mostly focused on equities. You could see this by taking a look at the All-Share Index of the NSE, and you would see that till date, it is only down by 9.8%. If you don’t have the heart for taking the risks that come with investing in stocks, and you still want to invest in mutual funds, then you can’t go any better than this.
(3) Vantage Balanced Fund
Launched in 2002 by Investment One, the Vantage Balanced Fund is a type of fund that focuses mostly on appreciation received from long-term capital investments. Long-term capital investments achieve their appreciation by maintaining a fixed income, a variety of money market, equities, and a variety of real estate investments. The NSE quotes the assets as high-quality equity instruments, while the bond issuers receive their investment-grade rating from any of the credit rating agencies that have been registered by the SEC.
Fund Price – N2.21
Fund Price – N2.87
Return – 29.9%
Ranking – Third
Note: This Fund is a kind of mixed fund, since its investments are seen in a variety of assets. Though managers of this type of mixed fund may have their own Dollar Fund, Equity-Based Fund, or their own Fixed Income Fund; the capability of the Balanced Fund trumps all of them. So if you need a form of investment that has a hand in everything then this is it, your best bet as far as the analysis of June 2020 is concerned.
(4) The Legacy USD Bond Fund
Launched in 2018, the Legacy USD Bond Fund is owned by the Asset Management of the FCMB. Registered with SEC, this is a Collective Investment Scheme that uses the US Dollar as its denomination. With an aim to generate long-term stable income, the Legacy USD Bond Fund makes its investments in fixed income securities that have been credit rated, and uses the US Dollar as their denomination. These fixed income securities are provided by Corporate entities, Supranational bodies, and the Nigerian Government.
Fund Price – N306.5
Fund Price – N360.5
Return – 24.4%
Ranking – Fourth
Note: If you are in the market for a fixed-income debt security similar to the Eurobonds, then you can consider the Legacy Bond Fund, it’s the best possible alternative. Though they stand at 24.4%, their bonds are remarkable with good market values, and good yields. The Legacy Bond Fund’s managers manage the Bond Fund, as well as a Money Market Fund, an Equity Fund, and a Fixed Income Fund. So, if you believe you can invest in Eurobonds, then this mutual fund is the best in its class.
(5) Vantage Dollar Fund
Launched in 2018 and owned by Investment One, the Vantage Dollar Fund is registered with the SEC, and functions in Nigeria as an open-ended unit Trust Scheme. They invest mostly in Sovereign Eurobonds, and Corporate Eurobonds. The Vantage Dollar Fund is the best option for investors that won’t be ordinarily able to access securities that are Dollar-denominated, due to the fact that they do not meet the minimum amounts needed to engage in those investments.
Fund Price – N401.02
Fund Price – N469.2
Return – 17.0%
Ranking – Fifth
Note: With Investment One being the first, this dollar mutual fund is the second on the list, and the second to also make it into the best 5 list. With a knack for fund management, these Dollar Mutual Funds can serve as a good investment source. This is another option from the top 5, a great one to consider as well.
Bubbling Under: Outlined in descending order, these funds are the other top 5 on the list.
- AIICO Balanced Fund
- VI ETF
- Coronation Fixed Income Fund
- CEAT Fixed Income Fund
- United Capital Euro Bond Fund
(6) Valualliance Value Fund
Regulated and Registered with the SEC, the Valualliance Value Fund, or Value Fund functions as a closed-end collective investment scheme. The units of the Value Fund are also listed on the NSE’s main board. Using the 3.2 billion Naira raised on the 30th of June 2011, as their initial public offer, the Value Fund began its operations. The Value Fund was initially known as the “SIM Capital Alliance Value Fund”, before they adopted their current name.
Fund Price – N103.2
Fund Price – N115.05
Return – 11.48%
Ranking – First
Note: Initiated by the ValuAlliance Asset Managers, the Valualliance Value Fund was seen as the fund with the best performance in August 2020. Though their net value remained at 4.73 billion Naira, this mixed fund progressed by 11.48% at the end of August from 103.2 Naira to 115.1 Naira.
(7) Cordros Milestone Fund 2028 & 2023
Known as target-date mutual funds, the Cordos Milestone Fund 2028 and 2023 works by first having an asset allocation start out investment, or a start out investment that is a mix of securities. These are investments that initially seek the growth of their capital, (which can be in the form of stocks), as they gradually become investments that want the preservation of this capital, (which can be the money market), all before the expected dates of 2028, and 2023.
Also known as lifecycle funds, these target date funds are meant to offer an easy way for investment to be done through a variety of assets. These are open-ended funds that allow their units to be offered continuously when they are established under a Trust Deed. The Cordos Milestone Fund 2023 progressed by 7.27%, while the Cordos Milestone Fund of 2028 progressed by 9.28%.
July 29th (Cordros Milestone Fund 2028)
Fund Price – N100.21
Fund Price – N109.51
Return – 9.28%
Ranking – Second
July 29th (Cordros Milestone Fund 2023)
Fund Price – N98.35
Fund Price – N105.50
Return – 7.27%
Ranking – Third
Note: Owned by Cordos Asset Management, this mixed fund utilizes an initial investment of 35 units, with subsequent additions being 10 units each. Four Funds are operated by the managers, with a dollar fund, and a money market fund as well.
(8) Cordros Dollar Fund
The Cordos Dollar Fund is designed to allow for convenient investments, and easy US Dollar returns. This mutual fund invests mostly in quoted Corporate Eurobonds with US Dollar-denominated securities like the Money Market Instruments, the Corporate Eurobonds, and the Sovereign Eurobonds. Their aim is to provide more returns than an ordinary domiciliary bank account.
Fund Price – N36,498.27
Fund Price – N38,986.04
Return – 6.82%
Ranking – Fourth
Note: This mutual fund is the best option among other fixed-income debt securities that are dollar-denominated. In August, this fund is the third entry in the list of best funds from the managers.
(9) VCG ETF
Launched in 2015 by Vetiva Fund Managers Limited, the Vetiva Consumer ETF, or VETGOODS ETF is an Exchange Traded Fund that is open-ended. Designed to track the companies on NSE Consumers Goods Index and their performance, the VETGOODS ETF also reproduces the yield performance and price that make up their index.
Made up of the Tobacco, and the Beverages/Food sector companies that stand at the top 15 in terms of liquidity and market capitalization, the NSE Consumer Goods Index is a price index that is subjective to the adjusted market capitalization.
Fund Price – N4.02
Fund Price – N4.27
Return – 6.22%
Ranking – Fifth
Note: One of the best products from Vetvita, this Exchange Traded Fund has seen a growth of 6.22%. Though they have a variety of ETF Funds, two of Vetvita’s funds declined, while three of their funds recorded positive growth in that same month. If you need an exchange traded fund, this is the best that the month of August has to offer.
Bubbling Under: Outlined in descending order, this is the remainder of the top 10
- PACAM EquityFund (5.45%)
7. Legacy USD Bond Fund (5.27%)
8. Vantage Equity Income Fund (5.15%)
9. VETBANK ETF (5.02%)
10. Legacy Equity Fund (4.5%)
This comprehensive list has been offered by the NSE to help you in your investment goals, savings, and other priorities.
We can term a Mutual Fund as an investment that comprises funds that have been collected from investors, all with the aim of investing in stocks, money market instruments, bonds, and other similar securities. Run by professional fund managers, Mutual Funds are invested to produce income, and capital gains for investors.
Mutual Funds hold an advantage which is beneficial to small investors—they give them the opportunity to access diversified, and professionally managed selections of bonds, equities, and other securities. Thus, each shareholder gets the chance to participate in the loss or gain of the fund.