By Udeme Ekwere

The net asset value of the 45 mutual funds on the Nigerian Stock Exchange as at August 19, 2011, stood at N78bn.

The information was posted on the website of the Securities and Exchange Commission on Thursday.

According to SEC, the net asset value of the 45 open-ended and real estate investment trust schemes listed in the secondary segment of the equities market rose by N3bn or four per cent from N75bn in the previous week ended August 12, to N78bn on August 19.

The posting, however, noted that the net asset value of the funds represented a decline of 17.7 per cent from the N94.37bn recorded in January this year.

The net asset value is used to describe the value of an entity’s assets less the value of its liabilities and is most commonly used in relation to open-ended or mutual funds because units of such funds are redeemed at their net asset value.

A mutual fund is a professionally managed type of collective investment scheme that pools money from large numbers of investors and invests such in stocks, bonds, short-term money market instruments and precious metals, in a few cases.

Mutual funds are highly recommended for retail investors because they provide small investors with the opportunity to invest in a number of stocks through a pool of funds, and provide investors with the opportunity to diversify their risk portfolio and maximise returns.

The mutual funds listed on the NSE include Stanbic IBTC Guaranteed Investment Fund with a value of N2.8bn; Stanbic IBTC Ethical Fund (N3.5bn); Stanbic IBTC Bond Fund (N3.59bn); Stanbic IBTC Nigerian Equity Fund, (N15.2bn); Stanbic IBTC Money market Fund (N6.5bn); and UBA Bond Fund (N462.2m)

There are also UBA Balanced Fund (N1.93bn); UBA Money Market Fund (N227.5m); UBA Equity Fund (N2.063bn); Women Investment Fund (N130.4m); Denham Management Millennium Fund (N24.17m); Paramount Equity Fund (N159.1m); and Nigeria Global Investment Fund (N87.76m).

Others are the Nigeria Energy Sector Fund (N1.1bn); Frontier Fund (N179.1m);

ARM Ethical Fund (N37.41m); and Coral Growth Fund (N3.3bn).

The SEC and NSE have been at the forefront of promoting and encouraging the floating of mutual funds and investors’ patronage of the funds.

The Chief Executive Officer, NSE, Mr. Oscar Onyema, had, during the recent listing of a closed-end fund, assured the investing public that promoting closed-end funds was a major area of the Exchange’s focus.

He disclosed plans to introduce five other products within the next five years, saying that in addition to equities, the NSE aimed to promote active trading in bonds, exchange traded funds, options and financial futures.

Source: Punch