Nigeria's mutual fund industry reached another record level in may 2015 as total net assets rose to N199 billion, 2.4% better than the N194 billion recorded in April. This is the 15th consecutive week that mutual funds assets had been on the ascendancy. Based on information released by the Security and Exchange Commission in its NAV Summary Report, Equity based Funds' Asset fail by 0.21%, going from N36 billion in April to N35.9 billion in May.
Asset of Bond Funds increased by 2.3% while that of Money Market Funds increased by 7.24%. Also Real Estate Investment Trusts saw their asset go down by 1.19% from N46.9 billion the month before to N46.3 billion. In like manner, Balanced Based Funds' asset took the biggest hit by going down by 4.82% thereby ending the month of May with total asset value of N8.29 billion. The asset value was previously N8.7 billion
Ethical funds' asset value increased marginally by 0.22% to end the month at N5.44 billion while Umbrella funds garnered a whopping 3.19% increase rising from N2.69 billion to N2.78 billion. Like ethical funds, Exchange Traded Funds also witnessed a marginal increase of 0.42% to stand at N4.63 billion having ended the month of April at N4.62 billion.
The increase in asset came from positive inflows to the industry. Within the month, the industry took in an estimated new money in the amount of N6.7 billion but coughed out an estimated N1.339 billion by way of redemptions. The trend of the flow remains virtually unchanged as much of it, 96%, went to money market funds. This shows that investors are still risk averse and not yet bold enough to dive into more risky fund structures like Equity Funds. With that Money Market extends its lead as the largest fund category by asset value. In April, the money market category represented 37% of total industry asset value but in May that increased to 38.6%. Arising from losses from UPDC REIT, the REIT category which had 24.2% of total mutual fund assets in April ended the month of May with assets large enough to be worth 23.3% of overall mutual fund value. Equity funds now represent 18.1% of total mutual fund asset value, down from 18.6% the previous month largely due to the combined effects of flight to quality and the bearish outlook of the Nigerian capital market towards the end of the month.
World Wide Mutual Fund Asset Value
The mixed performance not -withstanding, it is gratifying to report that the new total NAV of Nigerian Mutual Funds is slightly above $1 billion going by the current exchange rate of N196/$ but this is nothing when compared with the global mutual fund asset value of $31.32 trillion or the total mutual fund asset in the US of $43.78 billion as at April 2015. But granting the number and ages of funds in the US, Nigerian mutual fund investors should be happy at the progress being made by the industry.