₦airaland Forum

STRATEGY TO WIN DURING LOW RATE REGIME

Low rate in the fixed income space should not translate to no investment.

The truth is that a low-interest-rate regime is actually beneficial for the economy, as long as inflation continues to decline.

How do you win during a low-rate regime?

If you must invest in fixed income, opt for mutual funds that have bonds as their underlying assets. The rate of bonds is still much better than short-term instruments like treasury bills during a low-rate regime.

If you decide to stick to MMF, try to have at least two fund managers; this will help you have an average of two different rates combined. The fund that has a more consistent upward trend in rate takes a larger chunk of your investable funds, all other things being equal.

Consider investment in stocks. Though stocks are considered risky when compared with MMF, stock investment has great returns in three ways:
1. price appreciation - buy low, sell high
2. cash dividend payment, sometimes as regular as twice or even quarterly in some stocks
3. Bonuses, ie, payment of dividend using shares instead of cash, this in turn increases your holdings without additional cash commitment from your pocket.

When you buy fundamentally sound and regular dividend-paying stocks, you are sure of your returns and able to beat inflation, hence a real return is achievable.

Also consider a Real Estate Investment Trust (REIT); there are a few in Nigeria - SFSREIT, UPDCREIT, and UHOMREIT. If you don't have huge funds to buy physical property, a REIT is the best way to go if you want to enjoy rental income without owning a property.

Instead of the MDBs, use MMF to keep your cash; it will always have a better rate than a savings account.

Try a business if you can and are available. There are more business activities during a low rate regime because the currency seems to have higher purchasing power, and businesses can borrow cheaply compared to a high inflation and high rate regime.

Remember, it's better to have a low rate, which results in low interest and keep investing, than no investment, which means no interest at all.

For more on investment matters (mutual funds and stocks), reach out to me.

I wish you all a productive week ahead.

STRATEGY TO WIN DURING LOW RATE REGIME

Low rate in the fixed income space should not translate to no investment.

The truth is that a low-interest-rate regime is actually beneficial for the economy, as long as inflation continues to decline.

How do you win during a low-rate regime?

If you must invest in fixed income, opt for mutual funds that have bonds as their underlying assets. The rate of bonds is still much better than short-term instruments like treasury bills during a low-rate regime.

If you decide to stick to MMF, try to have at least two fund managers; this will help you have an average of two different rates combined. The fund that has a more consistent upward trend in rate takes a larger chunk of your investable funds, all other things being equal.

Consider investment in stocks. Though stocks are considered risky when compared with MMF, stock investment has great returns in three ways:
1. price appreciation - buy low, sell high
2. cash dividend payment, sometimes as regular as twice or even quarterly in some stocks
3. Bonuses, ie, payment of dividend using shares instead of cash, this in turn increases your holdings without additional cash commitment from your pocket.

When you buy fundamentally sound and regular dividend-paying stocks, you are sure of your returns and able to beat inflation, hence a real return is achievable.

Also consider a Real Estate Investment Trust (REIT); there are a few in Nigeria - SFSREIT, UPDCREIT, and UHOMREIT. If you don't have huge funds to buy physical property, a REIT is the best way to go if you want to enjoy rental income without owning a property.

Instead of the MDBs, use MMF to keep your cash; it will always have a better rate than a savings account.

Try a business if you can and are available. There are more business activities during a low rate regime because the currency seems to have higher purchasing power, and businesses can borrow cheaply compared to a high inflation and high rate regime.

Remember, it's better to have a low rate, which results in low interest and keep investing, than no investment, which means no interest at all.

For more on investment matters (mutual funds and stocks), reach out to me.

I wish you all a productive week ahead.

Chidimercy:
Thank you, I will reach out to you with the number on your profile

Okay. You welcome.

Chidimercy:
Please ,I know this is unrelated to this thread but I have seen that people here have good financial knowledge, I want an account I can open in trust for my children, where it could accumulate just like mutual fund and their can access the money when their are 18. Please any suggestion?

First open a bank account for them. Some banks have account for minors.

I will suggest you use two investment windows
Money Market and stocks.

Open a money market account and pick reinvest interest option.

Also Open a stock account and buy fundamentally sound and regular dividend paying stocks also reinvest the dividend back to the stock, with this you are sure of value while they grow.

To open MMF for minor, you will need the form method. Find the 4-page form attached.

To open a stock account, click the 3rd link in my signature, select 'Kiddies' as the investment type and 'Stockbroking' as the product, then supply the required information.

Stock Account Opening Requirements for Minors

Bank Verification Number (BVN) of the parent that is linked to the bank account of the child.
National Identity Number (NIN) of the parent or child
LGA
Mother’s maiden name
The child’s bank account details
Birth Certificate
Passport photograph (Parent/Child)
Valid means of identification e.g., international passport, national identification card, Voter’s card or Driver’s license
Utility bill not older than 3 months

You can reach out to me if you need further guidance

MPC CUSTS MPR BY 50 BASIS POINTS MPR NOW 27%

As predicted, given the current inflation figures, the MPC reduced the MPR. From now on, the MPR is 27%.

The implication is that the MMF rates may also see some downward trend, but it's still better to invest in MMF than to leave your money in your savings or fixed deposit account.

Be in touch if you have any concerns.

Tetrahedron:
Pls I need a stockbroker
Anyone available on this forum

You can come on board Investment One Stockbrokers. Click the third link in my signature to open an account or reach out using the contact information provided.

holluwai:
Hi, I would like to use your assistance.
I am looking to invest in mutual funds. I reckon first thing I need is a platform to sign up to enable that. I have tried blunest and invest now and both hasn’t been successful so is it a temporary issue or they’re unable to register new users? Also can you recommend a reliable platform to join and verify my account so I can proceed with investing. Please guide me, thanks(first timer)

You can send a PM or use the contact on my signature to reach out to me. You will be well guided afterwards

rukyboy:
I know the interest drops daily.

But is it compounded daily or monthly?.

Like do they reinvest my capital and Accrued interest daily , weekly or monthly

@rukyboy, check again my post you quoted the answers are there.

In addition, understand that your capital is not reinvested at any time rather it's your accrued interest that is reinvested every end of the month and becomes part of your capital.

This answer assumes you are talking about Stanbic otherwise accrued interest is reinvested at the end of each quarter for other fund managers

You can withdraw from your account at anytime without penalty after 30 days of investing your capital otherwise you pay 20% of the accrued interest on any amount you are withdrawing within 30 days.

Reach out to me if you need further guide on mutual funds.

Arizona86:
We are beginning to hear a lot of talks about inflation dropping to 20% lately and how food prices have drastically dropped. I don't know if this is the usual propaganda by the government and are we about to witness a drop in MPR rate which will affect our interest in MMF?

With inflation rate going down, it's expected that MPR will be reduced going forward. However, this is not supposed to be a negative experience it's good for the economy and your real returns will become positive all things being equal.

It could also mean a change in strategy for investors by looking the way of stocks. Ordinarily low rates favor stocks investment more than the fixed income instruments.

Like I will always advice, don't stop investing whether you are a low risk appetite or high risk appetite investor.

Remember investment is a marathon not a sprint. Consistency is the nature and culture investors are to imbibe to win all the time in this game called investment.

A luta continua; vitória é certa

bharkarh:
please what’s SFS

SFS Capital is a fund manager just like Stanbic and others you know. One of their products is the SFS fixed income fund, which I mentioned has a stable rate. Although the SFS fixed-income fund is not an MMF, it operates similarly, with quarterly dividend payments and an option to reinvest interest (Compounding). However, the major underlying asset of the fund is the FGN Bonds of different tenors, hence most investors who want to benefit from the FGN bonds and don't want to wait for that long can take advantage of investing in the SFS fixed income fund.

You can reach out to me if you wish to go with them.

Kabawhat:
Good morning, everyone. I hope you are all doing well. I have a question. I am experimenting with the FCMB legacy money market fund. Last month, I made an initial deposit of 10k naira to understand how it works, and throughout the month, I accrued decent profit of 169 naira. Today, I woke up to redeem my investment, and the total amount is 10,169 naira. And am get this error message


RATE LIMIT exceeded

Look at page 400 of this thread, the answer to your question is in one of my posts

MMF Managers you can pick from

I have observed here recently that most of the new entry into the MMF investment arena are so much concerned about rate. Yes it's good to be concerned about rate but let's get it clear MMF rate is daily valued and fluctuates, so there is no particular MMF rate that can be be preferred to the other in absolute terms.

Based on the nature of the investment, the rate is always in a range in the industry which is currently between 18 to 20%; every other consideration is centered on quality of customer services, easy of navigation of investment platform, ease of redemption etc.

In terms of safety of your funds it's the same irrespective of the fund manager. Once an MMF has the following parties to the fund, you are good to go:

Fund manager licensed by SEC
Custodian bank
Trustees
Government presence (SEC)

Using some of the above cretaria I will recommend any of these:

Stanbic
Norrenberger
First Ally
First Asset
SFS though it's a fixed income fund, it's operated like MMF and the rate is most stable compare to all others. Rate has been 19.01% for about a year now.

To go with any of the firms above get in touch or click on the link on my signature for some of them.

Happy new week.

bassdow:
Kindly also point out to those who might not know that Quarter of a year doesn't work like simple maths where you just say after [every] 4-months

A quarter is every three months, which makes us have 4 quarters in a year. Jan- Mar, April to June, July to Sept., and October to December.

Hence, reinvestment is done on 31st March, 30th June, 30th Sept, and 31st Dec.

Batman2412:
Am I supposed to expect end of quarter mmf reinvestment this month or next?

Irrespective of the fund managers, except for Stanbic, which does monthly reinvestment, once you pick the reinvestment of interest option during registration, it will be reinvested automatically at the end of each quarter, and September is the end of the 3rd quarter.

jephthal:
Good morning house, Please how Long does KYC take on Blunest?

I've submitted all the documents since Friday, it's still showing pending till now.

Also, I can't seem to login at the moment.

Thank you all for your time.

Talk to their customer care on phone if it’s not done by COB today

eziokwunwoko:
Goodmorning is it possible to open a stockbroking account for an elderly person who not resident iin Nigeria. Please how do i go about it

It's possible for anyone in the diaspora to open a cscs/stock account.

To make the process seamless, he can use his Nigeria details ie kyc documents to avoid notarization process if foreign details are supplied.

The requirements:
Any Nigerian government issued ID card
Utility bill not older than 3 months
Passport photo
Signature.

To open account for free with investment one stockbrokers, click the third link on my signature.
Account type is individual and the product is stockbroking

yak:
Which platform is best for mmf now.
I already have experience with stanbic and United capital.
I'm looking for the best rate

When it comes to MMF, it will be difficult to use the word best. Apart from the rate, there are many other factors investors consider when picking an MMF under any fund manager.

Moreover, the rate is always a range in the industry, currently between 18 to 20% net management fees, and for the fact that it's daily valued, the word best will be difficult to use.

However, you can go with Norrenberger and First Ally. From experience, you can get some value in terms of rate and good customer service.

Click the second link in my signature for First Ally or use the attached form for Norrenberger.

A305:
I wrote this on the Treasury bill thread, I figured it also applies here to MMF



CBN is in a dilemma at this point. They want stable FX rate, they want reduced inflation yet they want to reduce borrowing within and plan borrowing externally.

Let me break it down:

Nigeria inflation is sticky and VERY STUBBORN so much so that, eventhough the numbers Quarterly reveals inflation is easing, however Month on Month inflation fluctuates, it keeps rising and in some month falls, then rise again. Very stubborn.

If inflation was only reducing and no fluctuation seen; CBN would have cut rates hence T.bills yield will fallen even lower but CBN is freaking scared.

Here is another problem.

Nigeria is debt free from IMF but owing massive debt internally, Internal debts are easy to repay but it's hardly enough to stimulate the economy because think of it like a ponzi scheme that can NEVER crash.
Now, FG is looking to borrow externally because we can and technically, our debt to GDP ratio is good enough to allow us borrow externally. So FG will prefer foreign debt over internal debt, that was why you heard of the new foreign loan news 2 days ago. They want more of those debt if they need to boost spending. Nigeria spending is too low for our kind of economy.

So, if FG gets more of this foreign loans, they won't rely on internal debt as much to kept running the economy, hence CBN will cut rate, Tbills rate will plummet.

But here is where it gets interesting:

CBN needs FPI which has stabilized Naira/Dollar FX rate to 1500 since last year, and they can only get that when they raise interest rate for internal debt. If they aggressively cut rate, FPI will run away, some will pull their money and begin to buy stocks and Equities, that's why CBN hasn't cut rate since the last 3 or 4 quarters.


CBN’s stance so to keep squeezing inflation, even if the economy growth suffers short-term.

One more last reason to note is:

Global conditions (Trump’s tariffs, Fed cuts) could help Nigeria attract more FDI, which will further strengthen the Naira. That is why CBN is hesitant to cut rate.


How does this affect you, thinking rates are going back up?

Prepare for the wild ride because, you will keep experiencing rates like unstable NEPA light and prepare for the fall of rates once Tax laws are fully implemented next year.

Tinubu and Cardoso are really getting things right on this one.

@A305, true. Honestly low rate and low inflation is actually good for us collectively as a country. It strengthens real economy and even though rate may be low you will still have positive real returns once inflation continue to get lower.

Currently at this high rate real returns from fixed income instrument is still negative.

Investors who can take the risk associated with the stock market always end up better rewarded.

ogoo4real:
How does one Top-up his MMF account with Stanbic IBTC asset management limited.

Secondly does the accrued interest add up with the capital automatically after one month and roll over Thanks

Fund your wallet and from your wallet invest into your MMF account. Of recent they created a specialized UBA account for clients, you can transfer your money into that account which automatically means you have invested in MMF.

Alternatively you can use the traditional way ie transfer your funds into their UBA collection account using your e-account number as narration.

Yes, your interest is accrued daily and seen as part of your daily balance but the accrued interest becomes part of your capital at the end of each month.

bharkarh:
Stanbic didn’t allow me withdraw all my funds. I was told to keep a minimum balance of 5k naira

You can withdraw all your funds in stanbic and any other MMF if you pick the full redemption option otherwise a partial redemption will require you to leave 5k in your account

Please understand that the 5k is still your money and not a charge for service rendered.
If you decide to leave the 5k minimum amount it will continue to earn interest

bassdow:
hahaha. Wonder when the banks would start compensating us for all the free works we doing on their behalf

Well, there is always a compensation to every effort, one way or the other; nature has a way to compensate everyone.

bassdow:
...you mean DMB as in Deposit Money Bank ?

Yes.

tosinman:
Are you sure about this? that's my bank app

your app has explained and confirmed what I said.

MMF is not done by Access Bank but by Coronation Asset Management. That you see it on your bank app doesn't make it a product from Access Bank. Please understand that Access as a holdco is different from Access Bank Ltd.

If you open Stanbic Bank app, you will also see bluNest, which doesn't mean Stanbic Bank does MMF. It's stanbic Asset management that do MMF.

There is a product that Access Bank offers, which is more like a fixed deposit, not MMF.

Let's always understand the difference - fund managers and MDBs are not the same, even though they could be in the same holdco or group.

tosinman:
Anyone investing in Access Bank mutual funds through coronation asset management? I want to know about them

What Access bank is doing is more of a fixed deposit. It's not MMF.

MMF is not tenor based, amount to be invested is not capped at a paticular figure, it's an open ended fund, investors can redeem fund anytime after 30 days without penalty and returns doesn't attract WHT. All these are not obtainable in what Access bank is doing.

In the first place MDBs like Access are not fund managers.

Let's be well guided.

enque:
They are very inconsistent with crediting returns which makes it hard to even track the performance, if its still worth holding on to.

Last week, i had to call and send an email after 8days before they rectified it, and since then....another silence.

Please understand that SFS fixed income is not exactly like MMF. The underlying asset is FGN bonds. The rate is not valued daily, but rest assured, they will always credit all your returns. If you noticed, almost a year now it has been 19.01% unlike MMF, which fluctuates daily.

enque:
Meanwhile Emmasoft, I have scores to settle with your SFS people.
Let me just wait till September 2nd fes

I don't think there will be issues. Of course, you can always be in touch if there is a need to clarify any of their processes.

enque:
Pls o
Is any other person seeing a negative balance on their stanbic mmf current returns?

Relax, no issues, end-of-month activities just started. By tomorrow or early morning Monday, everything will be normalized with your August gains reinvested, and interest accruals will continue.

Kabawhat:
I have a question regarding my fund manager, FCMB. I opened an account with them on the 10th of this month and am currently testing their Money Market Fund (MMF) with a deposit of 10,000. So far, I love their service and find their rates good. However, I noticed that my KYC (Know Your Customer) is still pending. I'm concerned about topping up my account while the KYC is incomplete. I don’t want any issues to arise with my funds. Abegi make una advice me... Although I have a savings account with them, and it notices the mobile app link with the asset.... Please advice ooooh

Send a mail to customer care to express your concern and send the required documents. However, that should not stop you from topping up your account and also note that your having a bank account with FCMB doesn't have any particular advantage or benefit it attracts.

All customers are treated or pass through the same process irrespective of the bank you use.

Elui2:
Does the 30 days start counting from the initial deposit or does each deposit have to stay it's own separate days after topping up?

Every new deposit must complete 30 days to enjoy withdrawal without penalty.
As you already know, you can make a withdrawal anytime, only deposit up to 30days enjoy withdrawal without penalty.

For example, if you deposit 10k say, on the 1st of June and another 15k on the 5th of June, then another 20k on the 20th of June

If you wish to withdraw 45k on the 1st of July, you will pay 20% penalty on the accrued interest on 35k, but not on the accrued interest on the 10k, which is up to 30 days. Normally, during the withdrawal, the system will show you the sum that you are paying a penalty on ie, the one not up to 30 days stay in the fund

bassdow:
You didn't even ask if I have up to that. Anyways, I'm in for the very long term.
Would suggest you call support over the phone to confirm. Within the banking hall, you can get much more than that BUT from the app, is limited though don't know exact figure. Oga @emmasoft should have that figure

@234ng44uk and other investors, please note that the withdrawal limit on the app is 1 million, on the web portal is 5 million, and using the redemption form is unlimited.

heavenisreal18:
Pls investors, I have read up but not getting response to this

Pls for instance my first subscription was 5000, second subscription 10000, third subscription 15k ,I did it a week interval
My question now is ,will i get the maturity together at once or differently

MMF is not tenor-based. Investors determine when to terminate in full or in part.

Irrespective of the number of times you top up, all inflows are treated the same. Hence, when you log in, you will see your total balance, not according to how you top up. However, all deposits must stay 30 days or more before you can redeem without penalty.

Given your example, after the last deposit, you will see 30,000 plus the interest each of the deposits has accrued as your balance.

At redemption, after 30days, for example, you can withdraw 25,000 or less if doing a partial redemption or the total balance in your account if you are in for a full redemption.