The Managing Director/CEO of
The Nigerian financial market is reputed to be one of the best in terms of returns on investments. However, the downturn of 2008 is still affecting the way investors are patronising the market currently. What are the investments outlets available to the average Nigerian?
Investments generally available to Nigerians can be grouped into equities, fixed income, real estate and foreign currency. Under Equities, an investor can invest in equities of companies, which are publicly quoted on the
It is generally advised that investors in equities have a long term investment horizon of above three years. Seeing that we are approaching elections, returns from equities can be volatile, anyway. Under fixed income, an investor can simply open a savings account with a bank; have a fixed deposit with a bank; purchase bonds with fixed interest rates from state government, federal government or corporates. An investor can decide to purchase commercial papers issued by companies; or invest in treasury bills issued by the Central Bank of
And under real estate, an investor can choose to take on real estate projects themselves by buying or building directly or through an investment club made up of friends. Investors may also choose to invest in a Real Estate Investment Trusts (REIT) like the
Where do you recommend investors should put their money for the rest of 2014?
Where you invest would be dependent of a couple of factors which include your age, size of your wealth, projected future responsibilities and their timing and the currency of your future obligations. But in general, most experts would recommend that a larger portion of anyone's investment for the second half of 2014 should be allocated to fixed income investments followed by foreign currency investments. The political and economic uncertainties are likely to have the least negative effect on fixed Income investments in both local and foreign currency.
You recently launched a new product. Can you give more details on the product?
Who are the parties to
The investment decisions are made by the fund Manager -
You said it has a target of 12 per cent return p.a. What will the funds be invested in to achieve these returns? The fund managers will achieve this by investing exclusively in the following FGN Backed instruments, which include FGN bonds and treasury bills which are Triple "A" rated and FGN Guaranteed. The fund managers will also invest in fixed income instruments issued by blue chip corporates with a minimum "A" rating.
Can you tell us the specific advantages of investing in the fund from the investors perspective?
There are many advantages including security, liquidity, competitive yields and expertise among others. In terms of security for instance, the fund has an AA rating. This is partly because the fund focuses on investing in risk-free FGN backed instruments and blue chip corporate fixed income instruments with a minimum of "A" rating. The funds focus on fixed Income emphasises that the fund's primary focus is capital preservation with constant appreciation of value.
Talking of liquidity, the fund is very liquid and payment will be effected within five working days of the fund manager's receipt of the redemption form and electronic certificate while in terms of competitive yields by combining long and short dated fixed income instruments, we expect the yields offered by the fund to be more competitive than the rates paid on similar investments. As I said before we target a minimum yield of about 12 per cent p.a. based on projections as published in its prospectus. We are optimistic that the yield would turn out higher.
Also investing in the
There is the advantage of investment diversification:
Can retail investors participate in the
Why is the fund attractive to institutional investors?
The fund has a double "A" rating and is approved by the
Can international investors participate?
Yes, international investors can take advantage of high naira interest rates. Entry and exit would be seamlessly coordinated by the fund m anagers at the prevailing exchange rate of the CBN.
Most Popular Stories
- Islamic State Obliterating Cultural Landmarks in Mosul
- The 2014 Fastest-Growing 100
- 'Lucy's' Super Powers Tops 'Hercules' at Box Office
- Boehner Says Impeachment Talk Is Democrat Scam
- You're So Vain: Microsoft to Launch First 'Selfie Phone'
- VW Site Could Mean Another 2,000 Jobs for Chattanooga
- RV Sales See Highest Increase Post Great Recession
- U.S. Home Price Gains Slow for 6th Month in a Row
- Report: China to Declare Qualcomm a Monopoly
- Insecticides Permeate U.S. Food, Water Supply