BusinessDay 19 Oct 2017

18 BUSINESS DAY
C002D5556 Thursday 19 October 2017
I R
NVESTO
Helping you to build wealth & make wise decisions
Investor Analysis
Coronation Mutual Funds: Guaranteeing
investors competitive returns
IHEANYI NWACHUKWU
For many investors, it is
not always easy to decide
what Mutual Fund to
buy. Meanwhile, what
is a Mutual Fund? These
are collective/pooled investment
vehicles that allow you (an
investor) with limited resources
to own a diversified investment
portfolio managed by a seasoned
investment manager.
There are several SEC regulated
mutual funds dedicated to
investing in various asset classes.
Most of them with different
investment objectives include
real estate funds, fixed income
funds, equity funds, money market
funds etc.
Just recently, the Nigerian
capital market welcomed more
Mutual Funds, when within its
first year of operation; Coronation
Asset Management a subsidiary
of Coronation Merchant Bank
Limited listed three mutual funds
on the Nigerian Stock Exchange
(NSE) for trading and accessibility
by retail and institutional investors.
The three listed funds are
Coronation Money Market Fund;
Coronation Fixed Income Fund
and Coronation Balanced Fund.
Their Initial Public Offering (IPO)
was done from July 10, 2017 to July
28, 2017.
Abubakar Jimoh, chairman,
Coronation Asset Management
and Managing Director,
Coronation Merchant Bank
Group had described the fundslisting
as “yet another milestone
in the history of our company and
validation of our expertise in asset
management.”
He said: “By listing the
N2.168billion raised from the
three funds on the stock exchange,
we are demonstrating to our
investors that we are determined
and committed to offer better
prospects on their investments
across all market conditions”
Mutual Fund investors want
active engagement, efficient
management of their funds, and
quality reporting of Mutual Fund
performance –all these Coronation
Asset Management said it got
answers to.
In its value propositions to
investors of these Mutual Funds,
Coronation Asset Management
said; “We have developed a
technology base that supports
efficient and seamless service, as
well as promote transparent and
real time reporting of portfolio
holding and performances. We
believe in building a sustainable
relationship based on trust with
our clients by ensuring we deliver
on our promise of achieving
their financial goals as well as
committing to quality and excellent
service,”
They recommend investing
in the Mutual Fund which fits
best with investor’s long term
savings goal and tolerance for risk.
For example, the asset managers
would recommend an investment
in the Money Market Fund to an
investor who has a short-term
investment requirement and is
also apprehensive towards taking
risk
Ẇhile 479 subscribers
pooled N1.654billion through
the Coronation Money Market
fund, Coronation Fixed Income
had 39 subscribers and yielded
N315.205million; and Coronation
Balanced Fund with 64 subscribers
achieved N198.615million.
“These funds will guarantee
investors’ competitive yields as
the business has put together a
strong investment management
team who will be guided by an
investment committee with over
50years combined experience to
ensure the funds deliver on the
expectations of investors,” said
Aigbovbioise Aig-Imoukhuede,
a director in Coronation Asset
Management.
He added that “while the
Coronation Money Market Fund
offers investors the opportunity
to maximize return on their liquid
savings, the Coronation Fixed
Income and Balanced Funds
provide the best opportunity to
realize medium to long term
investment goals.”
The funds offer all categories
of investors, three viable options
in line with domestic economic
and financial market conditions,
an opportunity to diversify their
investment portfolios while
relying on the experience and
performance track record of the
Coronation Brand to ensure their
investments attain its required
financial outcome.
The funds and their investment
objectives
Coronation Money Market
Fund: The aim of the Money Market
Fund is to provide for preservation
of capital and moderate income,
and will make regular income
payment on a quarterly basis. The
fund will invest in safe short-term
instruments such as Treasury
Bills, Certificates of Deposit,
Commercial Paper (CP) and
Inter-Bank Call Money, and will
be optimally managed to generate
competitive returns in line with
the interest rates prevailing in the
market. The return benchmark
is to outperform the average
yield of the 90days Treasury Bills.
This fund is ideal for short term
focused investors. Interestingly,
Coronation Money Market Fund
provides group personal accident
insurance cover for investments
above N100,000.
Coronation Fixed Income
Fund: The aim of the Fixed Income
Funds is to provide regular and
steady income which is payable
on a semi-annual basis. The fund
will invest in a diverse pool of fixed
income securities such as FGN
bonds, State Bonds, Sub-national
Bonds, Corporate Bonds, and
Money Market securities. Though
capital appreciation in the fixed
income funds may be limited, the
risks are typically lower than that
of equity biased funds. The fund is
more suitable for investors looking
to invest for the medium to long
term. The return benchmark is to
outperform the average return of
the FMDQ bond index. This fund
is ideal for medium to long-term
focused investors.
Coronation Balanced Fund:
The aim of the Balanced Funds
is to achieve capital appreciation
over time while mitigating volatility
associated with investments
in equities by investing in fixed
income securities. The fund will
provide a combination of income
and moderate growth by investing
in a diverse pool of equities, and
fixed income securities such as
FGN bonds, State Bonds, Subnational
Bonds, Corporate Bonds,
and money market securities. The
fund is more suitable for investors
looking to invest for the longer
term. The return benchmark is
to outperform the composite
average return of the 90-day
Treasury Bill and Nigeria Stock
Exchange 30 Index. This fund is
ideal for medium-term focused
investors with a relatively higher
appetite for risk.
Take the Coronation Mutual
Funds advantage
In addition to maintaining a
mandate to deliver excellent and
efficient services under an ever
changing economic environment,
Coronation Asset Management
has a diverse team of experienced
investment managers, who create
innovative financial solutions
which are easily accessible to
investors.
Target Investors: Coronation
Mutual Funds are suitable for
individual and institutional
investors seeking to invest for
capital preservation, capital
gains and regular income,
regardless of your investment
time horizon as the funds provide
immediate liquidity to fund cash
requirements.
About the asset managers:
Coronation Asset Management
is a subsidiary of Coronation
Merchant Bank Group. The firm
provides investment solutions
to help their clients achieve their
financial goals. Target clients
include retail and high net worth
individuals, corporations, state
or federal government entities,
insurance companies, amongst
others. Coronation Merchant
Bank, the parent company of
Coronation Asset Management,
is an emerging merchant banking
franchise with industry leading
financial stability indicators and an
“A+” rating from Agusto & Co. The
credit rating is a valid testament to
the bank’s strong capitalisation,
good liquidity profile and robust
risk management framework
evidenced by the zero NPL ratio
as at December 2016.
The banking group was
established to fill the gap in a longunderserved
market segment,
seeking to address the need for
long term capital across key sectors
of the economy. The Group
offers investment and corporate
banking, private banking/
wealth management and global
markets/treasury services to
its diverse clients. It also offers
securities trading/brokerage,
asset management and trustees
services via its subsidiaries;
Coronation Securities Limited,
Coronation Asset Management
Limited respectively.
Driven by its vision of
becoming Africa’s premier
investment Bank and with an
asset base of over N100billion,
the Banking group is certain to
leverage its privileged direction
by some of Nigeria’s individuals
who excelled and rose to the
top of merchant banking sector
at its height of excellence to
become the industry model for
risk management, corporate
governance and responsible
business practices. Coronation
Merchant Bank’s quest for
industry distinction is evident in
its corporate identity which has
been designed to communicate
the Group’s vision, ambition and
inner strength
How to invest in the Coronation
Mutual Funds Offer
The asset managers have
created a seamless and easy
process for investments in the
Coronation Mutual Funds by
domestic and foreign investors,
through the development of
online and in-person channels for
investment requests. Investment
requests can either be completed
on its website www.coronationam.
com or investment requests
and payments can be done in
person at any Access Bank branch
nationwide.
Minimum amount to invest
To ensure the Coronation
Mutual Funds are also easily
accessible by every investor,
the asset managers placed the
minimum investment into the
fund at N10,000 with additional
multiples of N5,000 thereafter.
How to redeem investments
from the Coronation Mutual Funds
The asset managers’
redemption process is in line
with their mandate to deliver
excellent and efficient services
to investors. Domestic and
Foreign investors can initiate
redemption requests through
the same channels as investment
requests, and payments are
expected to be completed within
five business days of the receipt of
the Redemption notice.
Minimum balance available
following redemption
The Coronation Mutual Funds
allows investors to withdraw all
funds as they see fit, however, there
are different minimum balances
required across the funds to ensure
the investor continues to receive
interest on their balance.
Summary
Aside that your money is
managed by fund managers with
global exposure and experience,
across the various asset classes,
the asset managers diligently
focus on always creating value
for investors in line with their
promised investment objectives.
Open-ended mutual funds are
priced daily and fund managers
are always willing to buy back units
from investors. This means that
investors can sell their holdings in
mutual fund investments at any
time and not worry about finding
a buyer at the right price. Investors
can get access to their funds within
48 hours.
In managing your investments
efficiently, Coronation Asset
Management targets the best
execution price when dealing
with counterparties and brokers.
They are able to leverage the
benefit of investing large funds
which have been pooled together
from many investors. Their
investments are designed to limit
loss to capital through proper
and efficient diversification of
Coronation Mutual funds
investment portfolios. The asset
manager aims to reduce the
volatility of returns by investing in
a number of companies across
a broad group of sectors. Hence,
investor irrespective of the size
of the investments can enjoy the
benefits diversification brings in
minimizing any potential loss to
the investments.
The asset managers operate
a system where all information
regarding their investments and
performance are readily and
easily accessible to their investors.
While daily prices of their funds
are available on various platforms
reports on investor’s holding and
valuation can be obtained through
their online account.