Mutual Funds Trounce The Market:
As the Nigerian Stock market gives back most of its post election gains following sell offs amidst negative sentiments, majority of the mutual funds tend to be basking with consistent gains. The returns on most of the mutual funds have actually beaten their respective index especially the Allshare index. Going by the latest NAV Summary released by the SEC for the week ending May 15th 2015, 2 funds, Frontier Fund and ACAP Canary Fund gave their investors YTD returns that are greater than the average money market yield. While Money Market funds yield 13.45% on the average, those two funds returned 17.52% and 17.35% respectively YTD through May 15th.
As at May 15th, the Nigeria Allshare index recorded a YTD return of negative 0.63% while the NSE-Lotus Islamic Index returned 0.41% and Gold returned 3.33%. On the other hand, 4 of the mutual funds returned double digit performance, 37 came back with single digit returns while 8 ended with negative returns. Of the 8, two beat the Allshare index as well.
While the New Gold ETF returned 10.2%, Spot Gold made just 3.3% YTD return. In the same way, Lotus ETF and Lotus Investment fund returned 2.37% and 1.08% respectively while the NSE-Lotus Islamic Index returned 0.41%
Fund Sectorial look shows that 2 of the 17 Equity funds had negative return as well as 2 of the 10 bond funds, 1 out of the 8 Balanced based funds came back in the red, as well as 1 out of the 5 Ethical Funds while all the funds in the Umbrella and ETF category had positive YTD returns. However, Bond funds fail to outsmart the 5-Year Bond index which has recorded a whopping 10.34% /Index.Performance
It does appear that Nigerian Mutual funds are on a market beating course and those looking for yield in the current market environment may as well embrace mutual funds.