This is what your mutual fund invests in – Part (1)

This is what your mutual fund invests in – Part (1)

A mutual fund is a scheme that pools funds or money from various investors and then uses the pooled funds to invest in different asset types on behalf of the many investors from whom the funds had been pooled. In most cases, the investor knows that he or she is invested in one mutual fund or the other, without knowing exactly what the mutual funds invest in. In that case, mutual funds can be aptly described as pass-through entities.

Pass-through entities are legal entities or businesses that pass all of their income to the investors or owners.

It is, however, important for investors to know what their funds are invested or being invested in as that information helps investors gauge the suitability of a given mutual fund and if such mutual funds are in alignment with the investor’s risk profile or risk tolerance. In most countries, mutual fund companies are required to inform investors of what the funds are investing in by disclosing the same on their factsheets or other materials issued to investors. Knowing what your fund invests in helps you know if those positions are in line with your investment philosophy, objectives, and strategy.

Unfortunately, in the Nigerian mutual fund space, information about the top holdings of mutual funds is not readily available. After spending over three hours, I came face to face with some of the frustrations investors face when researching mutual funds in Nigeria. After over three hours, I could only find few factsheets or materials about what Nigerian mutual funds invest in. Because of how time-consuming the search is, I have decided to publish them as I discover the information. Here is the first part of the publication. ValueAlliance Fund

As of June 2021, the Valualliance fund had 27.42% exposure to the banking sector, 9.87% to Agriculture, 7.23% to Oil and Gas, 4.12% to Insurance and 3.14% to Industrials.

To be specific, the fund’s top 5 holdings include Zenith Bank, Seplat, Okomu, Presco and Guaranty Trust Bank. The Vetiva Banking ETF

According to the October 31, 2021 factsheet, the Vetiva Banking ETF invests in Guaranty Trust Bank, 31%, Zenith Bank, 29%, Access Bank, 12%, UBA, 11%, Ecobank Transnational (ETI), 6%, UBN, 5%, Fidelity Bank, 3%, and 1% in each of Sterling Bank, Wema and Jaizbank. Understandably the Vetiva Banking ETF invests only in the banking sector of the economy. The Vetiva Griffin 30 ETF

Per […]

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