According to reports, the total net asset value (NAV) of mutual funds in Nigeria fell by N197 billion in the first six months of the current year, 2021.
The total NAV of the 128 mutual funds fell from N1.479 trillion on December 31, 2020, to N1.282 trillion on June 30, 2021, according to data received from the Securities and Exchange Commission (SEC).
A mutual fund is a collection of funds pooled by a professional fund manager from several investors to invest in specific underlying securities.
A mutual fund portfolio is built and managed to meet a variety of financial goals. The type of mutual fund in which a person invests is determined by their financial goals and risk tolerance.
The NAV Summary Report was updated with 12 new funds, increasing the total number of funds on the report to 128. The fund market’s performance was by that of the Nigerian equities market, according to the report, as the NSE All-Share Index, which tracks the overall market movement of all listed stocks, lost 5.87 per cent as of June 30, 2021, and the market capitalization dropped N1.297 trillion.
Bond Funds, on the other hand, increased by N29.37 billion. Fixed Income Funds gained N17.105 billion in the first quarter, while Real Estate Funds earned N7.493 billion. Equities-based funds increased by N210 million in the first half of the year, while ethical funds increased by N126 million.
Since the beginning of the year, negative real returns have been seen by those funds due to the significant difference between short-term yields and inflation, as well as a migration to alternative and foreign currency-hedged products.