The total assets under management (AUM) of the mutual fund industry reached 1.52 trillion naira ($3.64 billion) in the first five months of the year.
This represents growth of 8.7% compared to a 10.6% decline in total assets in 2021.
One year after the publication of its report ‘Comparing Mutual Funds – Apples & Oranges’, Coronation Asset Management returns to the subject of comparing the performance of Nigerian mutual funds with its latest report entitled ‘Comparing Mutual Funds II – Apples & Oranges , and a Pomegranate’.
The asset management firm said the report is a key survey of Nigeria’s rapidly growing N1.52 trillion mutual fund industry. This year it delves into the differences between the amortized accounting method, used by most Nigerian funds, and the international mark-to-market accounting method, as applied to fixed income funds.
According to the report, the industry’s compound annual growth rate between 2015 and 2021 was 33%, or 14% per year in inflation-adjusted terms.
Managing Director of Coronation Asset Management, Aigbovbioise Aig Imoukhuede said, “We believe that Nigerian savers are making the long-term transition from building savings with banks to a culture of saving with mutual funds. shift.
“The report says that at just 11% the size of the pension fund industry, the mutual fund industry needs to sustain its momentum with confidence-building measures, first and foremost the adoption of market-to-market accounting and Global Investment Performance Standards (GIPS),” he said.
Coronation’s head of asset management research, Guy Czartoryski, pointed out that adopting GIPS would allow for a true comparison between fund performance rather than the “apples and oranges” we currently have.
“GIPS would open the door to credible fund comparison services such as Morningstar, Yodelar and the Financial Times’ fund comparison service. These advances would pave the way for significant expansion of the industry and the participation of international investors,” he said.
In 2020, the net asset value of 56 mutual funds listed on the Nigerian Exchange Limited (NGX) stood at N1.24 trillion at the end of 2020. This figure represents 88.3% of the total market net asset value Nigerian capital.
The number of mutual funds registered with the Securities and Exchange Commission (SEC) also fell from 76 in 2019 with a net asset value of 600 billion naira to 102 with a net asset value of over 1.43 trillion naira as of during the same period.
The high level of professionalism and quality of mutual funds in Nigeria has led to an increase in the rate of sponsorship and subscription by individuals, individuals and institutional investors.
Indeed, active portfolio management by experienced professionals offers investors better prospects for their investment, especially in times of market volatility and economic downturn as is the case in Nigeria, making mutual funds an optimal choice.