United Capital: Strong growth in funds under management signposts high level of investor confidence
Mutual funds provide investors access to investment markets by pooling their money with the money of several other individuals with similar investment goals.
By diversifying your investments, mutual funds are meant to assist with minimising the potential risks typically associated with investing.
Mutual Funds are growing much more quickly that anyone could have predicted a year ago, and with more money coming into the system there will be demand for more fund products as well as fund managers managing existing ones that are willing to help an investor achieve financial freedom.
Amid this development, Odiri Oginni, Managing Director/ceo, United Capital Asset Management said the company has constantly supported its clients on their journey to financial freedom through our mutual funds.
As at the week ended October 2, the Net Asset Value (NAV) data for Collective Investment Schemes (CIS) regulated by the Securities and Exchange Commission (SEC) shows remarkable growth across the mutual funds managed by the United Capital Asset Management.
“Our mutual funds growth has been on a steady increase in the last nine months while returns on the funds consistently outperformed benchmarks, placing us amongst the top 3 Asset Managers by mutual funds size in the market. This represents a significant achievement for not just United Capital Asset Management but the entire mutual fund industry as we see investors confidence grow among Fund Managers,” Oginni said.
Also commenting, Sunny Anene, Group Executive Director, United Capital Plc stated: “the strong growth in the funds under management of our Asset Management business points to a high level of investor confidence in our brand as we continue to reward our clients with investment diversification and above-market returns regardless of challenges in the market.”
“With an investment grade credit rating, asset under management in excess of N180billion, cutting across privately managed funds and 6 collective investment schemes, we remain positioned as a fund manager of choice in Nigeria today. We would like to encourage individuals saving towards different goals and targets to take advantage of the professional fund management and superior returns offered through our mutual funds”, he said.
Facts behind the growth
Facts that lead to the mutual funds growth despite the negative impact of the pandemic include: robust distribution network with strategic focus on the retail segment of the economy; superior returns relative to industry average and benchmarks, which allowed the fund manager to satisfy investors search for yields; and low interest rates on savings and money market instruments that have led to significant increase in the level of subscription to United Capital Asset Management Fixed Income Fund.
For its Eurobond Fund, another key driver of the growth was investors demand for foreign currency due to the weak outlook for the naira, currency diversification in addition to devaluation concerns.
The Fund Managers have also maintained a strong A credit rating for their Money Market Fund, which gives investors comfort in investing in the funds.
Market realities and how United Capital Asset Management surpassed them to beat the benchmark
“All our funds are actively management to generate alpha regardless of the market conditions. The current return on the Money Market Fund is 4.45percent, better than 1.07percent yield on the 91 day Treasury Bill in the secondary market.
“Also, the Bond Fund and Eurobond Funds’ yields stand at 8.1percent and 7percent compared to Benchmark returns of 3.1percent and 3.9percent respectively. The benchmark for the two funds are 3year Sovereign FGN Bond yields and composite index comprising of 70percent of the 3-year Nigeria sovereign Eurobond and 30percent of 3/6-month US Treasury Bill”, adding to the fund manager.
United Capital Asset Management mutual funds are actively managed to generate alpha returns for the unit holders regardless of the market conditions.