Fund Managers, NSE Move to Improve Collective Investment Schemes

The Nigerian Stock Exchange (NSE) is working with the Fund Managers Association of Nigeria (FMAN), stockbroking community and other stakeholders to make collective investment schemes (CIS) accessible to more retail investors.

The Chief Executive Officer of NSE, Mr. Oscar Onyema, who disclosed this in Lagos on Tuesday, noted that there has been significant improvement in the regulation of CIS, which are also known as unit trust schemes.

According to him, in order to ensure more retail investors patronise CIS and enjoy the numerous benefits, he said NSE, FMAN are discussing the modalities on how the stockbroking community can be used to market and distribute the products.

He added that they are also looking at how more disclosures would be made to investors to enable them increase their patronage.

Meanwhile, Onyema has disclosed that the NSE’s Exchange Traded Funds (ETF) market witnessed increased activity across key metrics in 2017, recording a 272 per cent growth in trade volumes, 33 per cent growth in turnover and a 39.5 per cent increase in market capitalisation to close the year at N6.69 billion.

“This is attributable to growing adoption of the asset class by investors and asset managers, as well as the new issuance of 2017 - the Stanbic IBTC Asset Management Limited (SIAML) Pension ETF 40 - which is the NSE’s first pension based ETF,” he said.

The NSE boss added that regarding the market performance, the Vetiva Banking ETF posted the highest return of 70 per cent in the ETF market segment, closely mirroring the gains recorded by the banking sector and its benchmark (The NSE Banking Index), whilst the NewGold ETF – which tracks the spot price of gold, posted the second highest returns (47.87 per cent).

He disclosed that the sector based ETFs, tracking the NSE Banking, Consumer Goods and Industrial sectors, were the most actively traded ETFs.

Onyema said the exchange will this year increase its focus on growing retail participation as a key component of a well-functioning and resilient market.

“To this end, we will be partnering with market stakeholders to deliver a number of financial literacy and investor outreach initiatives which align with existing plans (such as the Capital Market Master Plan and the National Financial Literacy Plan); as well as undertake new initiatives that can help drive a more radical change. At the crux of our efforts, is the establishment of a Retail Coverage Department, which will be dedicated to the development and publicity of simple, affordable and efficient investment products and services that can effectively support the Nigerian populace – at various stages of financial mobility – to create durable wealth,” he said.