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Top 10 Mutual Fund Managers In Nigeria / Mutual Funds In Nigeria: Please Share Your Experience / Best Nigerian Mutual Funds To Invest In? (1) (2) (3) (4)

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Mutual Funds by ernie4life(m): 9:07am On Sep 21, 2014
What is a Mutual Fund?
A mutual fund can be defined is an entity that pools cash from a variety of investors for the sole purposeof investing the cash in shares, bonds, treasury bills etc (all together called a portfolio of investments). The profit derived from the diversified pool of investments are shared to investors in the funds annually or semi annually or as stipulated in the fund prospectus.

Who Operates a Mutual Fund?
Mutual Funds are operated by professional investment firms made up of people who are savvy with the money and capital market. Mutual Fund, like in Nigeria can be operated by the Investment arm of banks, stock brokerage firms, investment banks etc.

How is it different from a stockbroking firm?
A stockbroking firm is simply a company that onyour behalfand instruction uses its license to buy and/or sell shares on the stock market. With a stockbrokerage firm you give them an instruction to buy or sell shares of your choice. You also keep tabs of the performance of your stocks on a daily basis and monitor its performance independently. For a Mutual Fund however, they determine which Investment decisions to make rather than you givinginstruction as to what shares should be bought for you or which you intend to sell. The shares you buy with the Mutual Fund is that of the fund and not that of the companies quoted on the stock exchange or indeed any quoted investments.

Do they only invest in stocks?
Off course not. Mutual Funds mainly invest in broad and diversified pool of investments. However these can be grouped into two;
A –  Money Market
B – Capital Markets
Money Market-
 Example of Money Market  instruments are Treasury Bills, Certificate of Deposits, Commercial Paper etc. These instruments are mostly debt note with a promise to pay a stipulated interest rates and the principal at a predetermined date.
Capital Markets
– Capital Markets are markets where Bonds, Stocks (Shares) are traded on a daily basis. So, a Mutual Fund can also use your money to invest in stocks and bonds. For example, when they invest in shares they hope that the value will appreciate thus increase the value of their fund or making them a nice profit when they sell the shares.But please note, most mutual funds usually outline the type of investments they hope to invest your money in. This can be found in their prospectus.

Do All Mutual Funds invest in the same categories of funds?
There are mainly 3 categories of funds they typically invest in. Fixed Income Funds – These are funds that are meant mostly to invest in fixed income securities. Fixed Income Securities are investments that pay a fixed return on an investment. For example, treasurybills offered by the Government are issued at a coupon (rate) of say 10%pa. Meaning, they pay an interest of 10% on any amount invested. Mutual Funds that are Fixed Income Related look out for safe investments that can guarantee a good incomestream. They mostly suited for investors with a long term view towards returns. Fixed Income Funds are safe investments as it mostly involves securities in government securities. Due to the nature of government securities their returns are typically low.II. Equity Funds – These are Mutual Funds that invest mostly in stocks and shares of companies are quoted. Some funds can also use fund assets tosubscribe shares for private placements. Equity Funds offer high returns but are associated with high risk.III. Mixed Income Funds – Mixed Income funds are a hybrid of Equity Funds and Fixed Income Funds. Because of their diversified nature, they often offer low risk for investors. Low risk as usual is associated with low returns.

Why Should I even Invest in them?
Mutual Funds afford people who do not have the time to invest in the money and capital market or do not know much about the business of buying and selling securities an opportunity to invest and make money. It also gives them an opportunity to save for the futre. By investing in mutual funds you have an opportunity of investing in a portfolio of heterogeneous instruments rather than having your money in just one basket. For example, your N100k investment in a single mutual fund can represent aninvestment in bonds, stocks, treasury bills etc.

How Much Can I Give them?
Mutual Funds typically have an investment band depending on the nature of the fund. Some can be as low as a minimum of N5,000, whilst some can be N100,000 and others N1,000,000.

Is it Profitable?
Like a every other business Mutual Funds are also exposed to the same risk and rewards that can determine whether they make or loose money. But since no business originally sets out to loose moneythey will often tell you that they are profitable. However, you can know how profitable a mutual fund is or can be if the fund owners already have a history. Most of the managers already have experience in running funds and so must have track records of their performance in the past. It is also important that you look at what type of returns they intend to offer to their investors.

What kind of returns can I expect?
This depends on the your risk appetite. For example,if you have N100k and think you can invest it in any business of your choice and get a profit of N20%, then investing in a mutual fund that promises 14% returns may not be a good idea for you. The return a mutual fund promises you should also be comparedto returns one can get on risk free investments suchas treasury bills etc. For example, if a Mutual Fund promises a minimum return of 12%pa and Government Pays interest of 14% on Treasury Bills, then investing yourself may just be a better idea. In general mutual funds will typically offer minimum returns that are benchmarked above inflation rates.

Are my returns tax free?
It depends on the mutual funds you are investing, some are tax free while others are not. Do before investing on mutual funds find out if it tax free or not and compare the benchmark rate the are giving you with the tax.

What are open and closed mutual funds?
Open Ended Mutual Fundsare funds that are open to continuous issuance of shares to investors. Operators of the fund continue to issue shares to the public to buy into the fund. Investors in the fund who do not wish to participate any further will simply resell their shares to the fund at the subsisting Net Asset Value. They can also reinvest in the funds whenever they want. Some Open Ended Funds also mandate you to keep your money with them for a specified period of time before you can sell or request for your money back. Open Funds arevery common.
Closed Ended fundson the other hand are funds that have limited number of shares that are sold at the initial public offering (IPO). Once the IPO is over, the fund closes sale of its shares to the public. Being a regulated fund, the shares are traded on the stock exchange like the shares of any quoted company. So, if an Investor decides he want his money back he will simply put up his shares for sale. The share price of a closed fund are determined by both the Value of the Portfolio as wellas the sentiments of investors towards demand andsupply. This is unlike the Open Funds that are determined by simply dividing the value of the portfolio by the number of shares issues by the fund.

Which is best for me?
This is a matter of personal choice and risk appetite. Closed Ended Funds are regulated by the Securities and Exchange Commission as well as theNSE. They play by the rules set by the regulatory authorities. Their share price are also published daily on the pages of Newspapers and can also be found on the internet. Open Funds are mostly unregulated and are not traded on the floor of the stock exchange. They are mostly floated by reputable organisations with a track record for performance.

What is in it for the fund managers?
Fund Managers are in it for the fees they charge you for helping you invest your money. They sometimes charge you fees upfront when you invest and also charge you a fee when they make a profit on your investment. Remember, profits are declared after deducting from revenue, cost of investments, statutory expenses, taxes, etc. Managers can charge fees ranging from 2%

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Re: Mutual Funds by ernie4life(m): 10:29pm On Sep 23, 2014
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Re: Mutual Funds by ifyalways(f): 9:40am On Sep 25, 2014
Ernie why did you stop writing na ?

3 Likes 1 Share

Re: Mutual Funds by ernie4life(m): 5:08pm On Sep 25, 2014
Continuation...............

Managers can charge fees ranging from 2% – 5% of the Value of the Portfolio. Take note at times the funds make more money than expected and in such instance the fund manager makes more money and still pays you the agreed rate with a little on top. 

The post above and its ensuing comments, if any, is purely the opinion of the writer. It therefore should never be considered as an investment advise of any sort. If required, readers should please consult a competent professional financial adviser for any investment decision.

Am compiling a list of mutual funds available in nigeria, there rates, there fund managers and there tax implications. Expect it soon

8 Likes

Re: Mutual Funds by jamace(m): 5:11pm On Sep 25, 2014
ernie4life: Continuation...............

Managers can charge fees ranging from 2% – 5% of the Value of the Portfolio. Take note at times the funds make more money than expected and in such instance the fund manager makes more money and still pays you the agreed rate with a little on top. 

The post above and its ensuing comments, if any, is purely the opinion of the writer. It therefore should never be considered as an investment advise of any sort. If required, readers should please consult a competent professional financial adviser for any investment decision.

Am compiling a list of mutual funds available in nigeria, there rates, there fund managers and there tax implications. Expect it soon
Good job. cool

4 Likes

Re: Mutual Funds by donpetros: 7:52am On Sep 27, 2014
Thanks OP, am eager to read your next post.
Re: Mutual Funds by ernie4life(m): 8:07am On Sep 27, 2014
get this list compiled will take time because I want to give you full details of each. so please exercise patients with me
Re: Mutual Funds by ifyalways(f): 10:02am On Sep 27, 2014
We are waiting.

Maybe you could do it in bits. Start with one company ; how they operate, bla bla and then the audience can debate, ask questions then we move on to the next one. undecided

Just a suggestion

4 Likes

Re: Mutual Funds by ernie4life(m): 11:20am On Sep 27, 2014
Ok that's what I will do
Re: Mutual Funds by ernie4life(m): 11:46am On Sep 27, 2014
FBN Money Market Fund

Minimum investment: N5,000
No withholding tax payable on capital gains
Minimum holding period: 30 days
Income distributions: Quarterly
Managed by FBN Capital Asset Management Limited.
No guaranteed income. That means income is paid depending on how well the fund performs. 

FBN Fixed Income Fund

Invested in fixed income securities such as bonds and treasury bills
Minimum investment: N50,000
No withholding tax payable on capital gains.
Minimum holding period: 90 days
Income distributions: Semi-annually
Managed by FBN Capital Asset Management Limited.
No guaranteed income. That means income is paid depending on how well the fund performs.  

FBN Heritage Fund

Invests in equities, bonds and treasury bills
Minimum investment: N50,000
No withholding tax payable on capital gains
Minimum holding period: 90 days
Income distributions: Annually
Managed by FBN Capital Asset Management Limited.
No guaranteed income. That means income is paid depending on how well the fund performs.  

* units redeemed earlier than the minimum holding period will incur a processing fee of 20% on the income earned on the value of such redemptions.

Please before investing in any of the above consult your financial adviser to learn more.

2 Likes 1 Share

Re: Mutual Funds by Nobody: 3:25pm On Sep 27, 2014
ernie4life: FBN Money Market Fund

Minimum investment: N5,000
No withholding tax payable on capital gains
Minimum holding period: 30 days
Income distributions: Quarterly
Managed by FBN Capital Asset Management Limited.
No guaranteed income. That means income is paid depending on how well the fund performs. 

FBN Fixed Income Fund

Invested in fixed income securities such as bonds and treasury bills
Minimum investment: N50,000
No withholding tax payable on capital gains.
Minimum holding period: 90 days
Income distributions: Semi-annually
Managed by FBN Capital Asset Management Limited.
No guaranteed income. That means income is paid depending on how well the fund performs.  

FBN Heritage Fund

Invests in equities, bonds and treasury bills
Minimum investment: N50,000
No withholding tax payable on capital gains
Minimum holding period: 90 days
Income distributions: Annually
Managed by FBN Capital Asset Management Limited.
No guaranteed income. That means income is paid depending on how well the fund performs.  

* units redeemed earlier than the minimum holding period will incur a processing fee of 20% on the income earned on the value of such redemptions.

Please before investing in any of the above consult your financial adviser to learn more.

Do they guarantee re-payment of my principal, provided I hold to maturity and regardless of the market trends?

1 Like

Re: Mutual Funds by ernie4life(m): 3:27pm On Sep 27, 2014
sys007:

Do they guarantee paying back my principal, provided I hold to maturity?
yes the do but still ask before investing, I don't work there so I don't know
Re: Mutual Funds by ernie4life(m): 3:31pm On Sep 27, 2014
Kakawa Guaranteed Income fund(kgif)

12% interest per annum
Interest paid twice a year.
Minimum investment is 50k
No with holding tax
Principal is guaranteed anytime 
Managed by Investment One financial services( formerly GTB asset management)

4 Likes 1 Share

Re: Mutual Funds by Nobody: 4:05pm On Sep 27, 2014
ernie4life:
yes the do but still ask before investing, I don't work there so I don't know

Would Ione guarantee paying back my capital if I invest in mygoldpass? Again, regardless of market trends, recession for instance?

I'm asking this question 'cos I plan to invest and hold (both principal and interest) for a minimum of 5years.
Re: Mutual Funds by ernie4life(m): 4:12pm On Sep 27, 2014
sys007:

Would Ione guarantee paying back my capital if I invest in mygoldpass? Again, regardless of market trends, recession for instance?

I'm asking this question 'cos I plan to invest and hold (both principal and interest) for a minimum of 5years.


if you will take my advice, I will say u do kgif, it's interest rate is same with mypass gold but while mypass gold charges withholding tax, kgif doesn't. note both mypass gold and kgif are products of investment one, if you need more clarification u can send me a pM

in both products ur interest and capital are guaranteed but in kgif u stand a chance of getting more interest

3 Likes

Re: Mutual Funds by Nobody: 4:35pm On Sep 27, 2014
ernie4life:

I work at investment one,
if you will take my advice, I will say u do kgif, it's interest rate is same with mypass gold but while mypass gold charges withholding tax, kgif doesn't. note both mypass gold and kgif are products of investment one, if you need more clarification u can send me a pM

in both products ur interest and capital are guaranteed but in kgif u stand a chance of getting more interest

Thank you for the piece of advice.
I've just studied KGIF product. It looks promising except that a portion of funds are invested in equities amongst the fund asset classes. That's a risk! I will have to take my time to analyze it properly.
All the same, thank you so much for the information provided.
Re: Mutual Funds by carpenter(m): 5:00pm On Sep 27, 2014
ernie4life:
if you will take my advice, I will say u do kgif, it's interest rate is same with mypass gold but while mypass gold charges withholding tax, kgif doesn't. note both mypass gold and kgif are products of investment one, if you need more clarification u can send me a pM
in both products ur interest and capital are guaranteed but in kgif u stand a chance of getting more interest

ernie4life

Is there a factsheet for kgif? Am interested in seeing what they offer.
Re: Mutual Funds by ernie4life(m): 5:02pm On Sep 27, 2014
carpenter:

ernie4life

Is there a factsheet for kgif? Am interested in seeing what they offer.
yes there is, I will need an email to forward it to.

or go to investment-one.com and read more of kgif
Re: Mutual Funds by ernie4life(m): 5:13pm On Sep 27, 2014
am compiling stanbic ibtc mutual funds, expect it soon
Re: Mutual Funds by petikal(m): 7:25pm On Sep 27, 2014
How much percentage is deducted by fund mangers for KGIF?

Also, is the interest rate fixed regardless of amount invested or does it appreciate with volume?
Re: Mutual Funds by ogawisdom(m): 9:29am On Sep 28, 2014
ernie4life: Kakawa Guaranteed Income fund(kgif)

12% interest per annum
Interest paid twice a year.
Minimum investment is 50k
No with holding tax
Principal is guaranteed anytime 
Managed by Investment One financial services( formerly GTB asset management) 

Do u kw of any other mutual fund dt can pay a guaranteed 12percent of ones principal per annum payable every three months. Kgif pays after six months dts too long.
Re: Mutual Funds by ernie4life(m): 11:27am On Sep 28, 2014
ogawisdom:

Do u kw of any other mutual fund dt can pay a guaranteed 12percent of ones principal per annum payable every three months. Kgif pays after six months dts too long.

I don't know, try FBN Fixed Income fund although I don't know the interest rate and if it's guaranteed, but I will advice u make enquiries and do well to let us know
Re: Mutual Funds by ernie4life(m): 11:29am On Sep 28, 2014
petikal: How much percentage is deducted by fund mangers for KGIF?

Also, is the interest rate fixed regardless of amount invested or does it appreciate with volume?

I think the fund managers collect 1.8% am not sure ttthough.

and the interest is fixed no matter the amount you invest

3 Likes

Re: Mutual Funds by angelo82: 3:00pm On Sep 28, 2014
sys007:

Thank you for the piece of advice.
I've just studied KGIF product. It looks promising except that a portion of funds are invested in equities amongst the fund asset classes. That's a risk! I will have to take my time to analyze it properly.
All the same, thank you so much for the information provided.


Yeah the products sounds good but I don't understand why they are investing part of it in Equities too but something tells me that they know what they are doing……..
Re: Mutual Funds by angelo82: 3:04pm On Sep 28, 2014
ogawisdom:

Do u kw of any other mutual fund dt can pay a guaranteed 12percent of ones principal per annum payable every three months. Kgif pays after six months dts too long.

For them to give you fixed 12% on your fund,the only tangible reason is that they must have invested largest part of your money in FGN Bond and thats why they are paying the interest every 6 months…..So far the company is trustworthy,then you should know 6months is not so long to earn such a high rate..…..I ready from UBA website that their Bond Fund return 13% within one year but I don't have any experience with them…

1 Like

Re: Mutual Funds by ogawisdom(m): 3:31pm On Sep 28, 2014
angelo82:

For them to give you fixed 12% on your fund,the only tangible reason is that they must have invested largest part of your money in FGN Bond and thats why they are paying the interest every 6 months…..So far the company is trustworthy,then you should know 6months is not so long to earn such a high rate..…..I ready from UBA website that their Bond Fund return 13% within one year but I don't have any experience with them…

I want to get my interest paid after a maximum of three months is dt too much to ask on a minimum of 12% pa
Re: Mutual Funds by angelo82: 3:36pm On Sep 28, 2014
ogawisdom:

I want to get my interest paid after a maximum of three months is dt too much to ask on a minimum of 12% pa

I didn't tell you is too much to ask…..But the obvious thing is that for them to pay you 12%,it means they are investing your money in FGN Bond which means they can only pay you 2 times in a year which is every six months…..There is no way they can pay you before that because FGN Bond make interest payment bi annually and they will have to get paid before they can pay you.If you like 90days interest payment then you will need to switch fund…..

1 Like

Re: Mutual Funds by ernie4life(m): 7:23pm On Sep 28, 2014
Stanbic IBTC Guaranteed Investment FundIntroduced in 2007, this Fund is designed to offer investors potential upside from the equity markets while protecting them against any risk to their principal investment. The principal amount invested is guaranteed against diminution in valueprovided the investment is held for a minimum of three months.The Fund’s objectives are achieved by investing a minimum of 75% of the portfolio in fixed income securities including Federal Government Bonds, Money Market Securities and other approved by Nigeria’s Securities & Exchange Commission; and a maximum of 25% in equities of blue chip companies listed on The Nigerian Stock Exchange.The Stanbic IBTC Guaranteed Investment Fund (“SIGIF”) was launched in 2007 at a nominal value of N100.00 per unit. Although the primary objective of The Fund is to achieve long-term capital appreciation of its assets, the principal amount invested is also guaranteed against diminution in value provided the investment

2 Likes

Re: Mutual Funds by Ikazuagbe(m): 8:43pm On Sep 28, 2014
Kindly shed more light between STANBIC IBTC MUTUAL FUNDS and ARM MUTUAL FUNDS in terms of their: similarities and differences,better dividend payment,better for long term investment and others.
Re: Mutual Funds by ernie4life(m): 8:57pm On Sep 28, 2014
Ikazuagbe: Kindly shed more light between STANBIC IBTC MUTUAL FUNDS and ARM MUTUAL FUNDS in terms of their: similarities and differences,better dividend payment,better for long term investment and others.
am still on stanbic ibtc, when am done I will start arm, but anybody with experience on the two can help

2 Likes

Re: Mutual Funds by ifyalways(f): 10:00pm On Sep 28, 2014
Ernie well done.

@All, for KGIF, anyone ever enjoyed excess income ie profit sharing besides the usual 12%? I'm kind of curious.
Re: Mutual Funds by ifyalways(f): 10:03pm On Sep 28, 2014
ogawisdom:

I want to get my interest paid after a maximum of three months is dt too much to ask on a minimum of 12% pa
12% and 3 months max payout? That's far fetched, IMO. If however you see one, do share with us.

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