Mutual Funds are investment schemes which are professionally managed. For those who have heard of lots of investment options and wonder which they can trust so as not to be scammed, mutual funds are a type of investment you should look into. Mutual funds are a pool of funds that are professionally managed by expert mutual fund managers. Mutual funds are relatively safe because the mutual fund managers keep a record of the performance and growth of these funds. They are also able to make required changes so that the funds perform well and the investors can get the best possible returns.
Mutual funds are controlled by an Asset Management Company (AMC), this is usually a renowned investment company that pools the funds from a group of investors. They then invest these funds in bonds, stocks, and securities. There are many forms of mutual funds in Nigeria that offer different conditions for investment and returns on investment.
In mutual funds, a number of investors gather (which includes you) put a certain amount of money in and thus a mutual fund is created. The profit from the investments is shared among all investors.
List of Mutual Funds in Nigeria
There are different types of mutual funds. These are:
Fixed income funds
Fixed income funds offer you the opportunity of investing your money with low to medium risk. These funds allow investors to get stable revenue from investing majorly in debt securities such as a government bond, corporate bond, certificate of deposit (CD), municipal bond, or preferred stock.
Here are some examples of fixed income funds:
EDC Fixed Income Fund
Lead Fixed Income Fund
Coronation Fixed Income Fund
Stanbic IBTC Guaranteed Fund
Stanbic IBTC Conservative Fund
Balanced funds
These types of mutual funds are considered to be of medium risk. They also specialise in long-term investments which bring in returns slowly but steadily. Below are examples of Balanced funds: Coronation Balanced Fund
Pacific-American Climate Fund (PACAM) Balanced Fund
Stanbic IBTC Balanced Fund
FBN Heritage Fund
United Capital Wealth for Women Fund
Pure equity funds
Pure equity funds are a type of mutual fund specialise in long-term investments. The aim is to gradually grow the capital. Pure equity funds are considered to be of high risk. This type of mutual fund buys shares of Nigerian enterprises or foreign enterprises that operate in Nigeria. Below are examples of such pure equity funds:
FBN Nigeria Smart Beta Equity Fund
Stanbic IBTC Aggressive Fund
Coral Growth Fund
Afrinvest Equity Fund
UBA Equity Fund
Mutual Funds in Nigeria
Before you choose the particular mutual funds, you want to invest in, it is important you understand the major mutual funds available in the market and how those funds have performed over time.
Stanbic IBTC Aggressive Fund
Stanbic IBTC Aggressive Fund is popularly known for offering competitive returns. It also diversifies its investment options, aggressive allocation. They are also able to trade an asset quickly without causing a drastic change in the asset’s price. The Stanbic IBTC Aggressive fund offers low to medium volatility (trading price), hence relatively lower risk.
The fund is one of the Stanbic IBTC Umbrella funds. Others include the Stanbic IBTC Absolute and Stanbic IBTC Conservative funds. Stanbic IBTC Aggressive Fund is reported to typically invest a minimum of 60% of its assets in the equity market and the other 40% in fixed income securities. Stanbic IBTC Aggressive Fund is a great option for mutual funds’ investments; however, it is best suited for investors who can bear high risk. If you would prefer those with low risks, it is safer to join the Conservative mutual funds. If you want to totally avoid taking risks, go for the Absolute Return mutual funds where they invest 100% in fixed income securities and your money is much more guaranteed. Stanbic IBTC Aggressive Fund is managed by Stanbic IBTC Asset Management and you can start with just ₦5,000.
FBN Money Market Fund
First Bank Capital Limited offers the following mutual funds:
FBN Money Market Fund
FBN Fixed Income Fund
FBN Heritage Fund
The investments in the mutual funds offered by First Bank of Nigeria are considered to be one of the safest. They are good for those do not want to invest a lot of money at once, have medium expectations, and want to have their money back in a short time. You can start with just N10,000. You receive your revenue quarterly. You can expect the interest of 14% in FBN Mutual Funds.
Zenith Equity Funds
The Zenith Equity Fund invests majorly in equities as well as income securities.
This Fund is designed for investors seeking to maximise their returns at minimal risk. Investors are able to build wealth at relatively lower risk than direct stock investments.
Other mutual funds offered by Zenith Capital Limited are:
Zenith Equity Fund
Zenith Income Fund
Zenith Ethical Fund
United Capital Balanced Fund
This mutual fund invests in equities and fixed income instruments.
United Capital has other mutual funds such as:
United Capital Bond Fund
United Capital Equity Fund
United Capital Money Market Fund. You can start with as little as N10,000.
United Bank of Africa (UBA) Asset Management Limited
United Bank of Africa (UBA) Asset Management Limited offers the following mutual funds:
UBA Money Market Fund
UBA Bond Fund
UBA Balance Fund
UBA Equity Fund
ARM Aggressive Growth Fund
ARM offers other funds such as:
ARM Money Market Fund
ARM Discovery Fund
ARM Aggressive Growth Fund
ARM Ethical Fund
ARM Mutual Funds
ARM Mutual Funds is a perfect way to invest money for those who are not willing to drop large sums of money. The investment is considered to be of low risk. You can invest with as little as N5,000. If you want to increase your investment, you can add money to your account at any time you want. Returns are paid off every quarter and you can expect a rate of interest as high as 15,97%.
Other mutual funds are:
Cowry wise
First City Monument Bank Mutual Funds
Stanbic IBTC Pension
EDC Fixed Income Fund
Lead Fixed Income Fund
Coronation Balanced
Disclaimer
This article is meant for general informational purposes only and does not substitute for professional advice. Do seek professional advice when you want to invest in any mutual fund scheme.