Money continues to flow into the Nigerian Mutual fund industry, according to data released by the Security and Exchange commission and analyzed by Quantitative Financial Analytics Company Ltd. Investors added an estimated N5.7 billion of new capital into the sector but also withdrew an estimated N5 billion during February 2015 bringing the aggregate total assets under management to N182.5 billion as performance gains added an additional N1.007 billion to assets under management.
Equity funds led the rest of the funds by attracting N2.7 billion in new assets and bringing its YTD to N3.8 billion although the fund category witnessed YTD outflow of N2.09 billion.
Money Market funds which had attracted the largest new money in January, saw inflows of N1.6 billion and outflow of N1.2 billion in February leaving it with a YTD inflow and outflow of N8.8 billion and N1.4 billion respectively. (Click on the link below to see all)
By the end of February, Investors had injected an estimated total of N17.76 billion and had withdrawn about N7.34 billion since the beginning of the year, 2015. This means an estimated net inflow in the sum of N10.53 billion for the year. ((Click on the link below to see YTD all)
A noticeable trend in the flow analysis is that more money was attracted in January than in February while February saw more outflows than January. The reason may not be farfetched by looking at events that surround the Nigerian capital market in recent times. While the seeming success against the Boko Haram sect does not seem to have impacted the market as expected, the political uncertainty from the upcoming presidential and other national and house elections may have prompted investors to tread with caution and adopt a wait and see attitude to the market. It might have prompted some investors to pull out some of their investment. The devaluation of the Naira might have caused some foreign investors to pull some of their investments
Besides, granting that many investors in Nigeria are dividend or high yield investors, the fact that most of the mutual funds have yet to declare any divided for the previous fiscal year may also have a share in this perceived loss of appetite for mutual funds. Thanks to UPDC REIT which has set the ball for dividends rolling.
All hopes are not lost. It is hoped and believed that as light appears at the end of the Boko Haram tunnel and the presidential election comes and goes with Nigeria in one piece while global oil prices stabilize as the Naira finds its appropriate market value, momentum and vibrancy will return to the market and we begin to speak in terms of bigger Asset Under Management of Mutual Funds.