Investors in Nigerian money market funds have reaped mixed results within the 8 weeks that ended in September 30, 2016.
According to data obtained from the Nigerian Securities and Exchange Commission (SEC), some of the funds recorded positive risk-adjusted returns while others realised negative returns.
A money market fund is an open-end mutual fund that provides retail investors with the opportunity to earn respectable return by investing in near-cash instruments at minimal risk.
Presently, there are 7 money market funds duly registered with the SEC, each with a distinct fund manager.
Leading the pack of positive performers is the Stanbic IBTC Money Market fund (STANBIC), which posted a period risk-adjusted return of 4 periodic. The UBA Money Market Fund (UBA) with a period risk-adjusted return of 2 percent, and the Meristem Money Market Fund (MERISTEM) with a period risk-adjusted return of 1 percent, ranked second and third respectively.
However, investors in the other money market funds must be berating their woes as the funds lost value within the period. The ARM Money Market fund (ARM) leads the losers cluster with a period risk-adjusted return of -9 percent, followed closely by AIICO Money market funds (AIICO) with -8 percent. FBN Money Market Fund (FBN) and AXA Mansard Money market fund (AXA MANSARD) complete the losers’ number, having posted a negative period risk-adjusted return of -7 percent and -2 percent respectively.
On the other hand, the average risk as evidenced by the 8 weeks NAV Volatility of the funds for the period, stood at 4.3 percent. An analysis of the risk profile of the funds shows that MERISTEM is the riskiest of all, having registered period risk of 14.22 percent.
The period risk for the other funds are 6.83 percent for FBN, 4.39 percent for AXA MANARD, 2.87 percent for STANBIC, 0.88 percent for UBA, 0.65 percent for ARM, and 0.35 percent for AIICO.