Top-Performing Nigerian Equity Funds in January 2025: Key Insights for Investors
In January 2025, the Nigerian stock market saw a positive start with a 1.53% gain in the All-Share Index (ASI), which set the tone for equity-based collective investment funds. These funds, which primarily invest in stocks, often mirror market trends but also provide the advantage of diversification, mitigating risks associated with individual stocks. As professional managers actively adjust portfolios, these funds tend to deliver better performance than individual investments.
According to the Securities and Exchange Commission (SEC) valuation reports, several funds stood out for their exceptional performance in January:
1. Halo Equity Fund
With an impressive 110.79% YtD yield, the Halo Equity Fund, managed by Halo Asset Management, topped the list. Despite its stellar performance, questions surround the sustainability of such rapid gains, considering its smaller size (N16.644 billion NAV). The fund’s low bid-ask spread of 0.82 is appealing to investors.
2. Frontier Fund
Managed by SCM Capital Limited, the Frontier Fund recorded a 72.24% YtD return in January, continuing its strong performance from 2024. With a larger NAV of N446.031 billion and a broad investor base of 2,466 unit holders, it provides a more stable investment option compared to smaller funds. However, its bid-ask spread of N9.70 may affect frequent traders.
3. Guaranty Trust Equity Income Fund
This more conservative fund managed by Guaranty Trust Fund Managers delivered a 6.16% YtD return. With a strong NAV of N641.688 billion, the fund benefits from liquidity due to its low bid-ask spread of 0.03 and stable investor base of 479 unit holders.
4. Stanbic IBTC Aggressive Fund (Sub Fund)
While posting a 4.69% return in January, this fund’s longer-term growth potential remains strong, with a 47% return in 2024. Its large NAV of N800.123 billion adds credibility, though the high bid-ask spread of N108.67 may affect frequent investors.
5. Meristem Equity Market Fund
With a 4.56% YtD return, this fund has shown consistent growth, posting 37.21% in 2024. Its large NAV of N896.426 billion indicates investor trust, and its low bid-ask spread of 0.08 makes it highly liquid.
Key Takeaways for Investors
• High-Return Funds: Funds like Halo Equity Fund and Frontier Fund offer high returns but come with higher volatility.
• Stable Options: Guaranty Trust Equity Income Fund and Meristem Equity Market Fund offer balanced returns with less risk, making them suitable for more conservative investors.
• Risk vs. Reward: Investors should align their choice of fund with their risk tolerance, investment horizon, and liquidity needs.
The SEC valuation reports provide valuable insights into the current market trends and the performance of equity-based funds, helping investors make informed decisions.
In January 2025, the Nigerian stock market saw a positive start with a 1.53% gain in the All-Share Index (ASI), which set the tone for equity-based collective investment funds. These funds, which primarily invest in stocks, often mirror market trends but also provide the advantage of diversification, mitigating risks associated with individual stocks. As professional managers actively adjust portfolios, these funds tend to deliver better performance than individual investments.
According to the Securities and Exchange Commission (SEC) valuation reports, several funds stood out for their exceptional performance in January:
1. Halo Equity Fund
With an impressive 110.79% YtD yield, the Halo Equity Fund, managed by Halo Asset Management, topped the list. Despite its stellar performance, questions surround the sustainability of such rapid gains, considering its smaller size (N16.644 billion NAV). The fund’s low bid-ask spread of 0.82 is appealing to investors.
2. Frontier Fund
Managed by SCM Capital Limited, the Frontier Fund recorded a 72.24% YtD return in January, continuing its strong performance from 2024. With a larger NAV of N446.031 billion and a broad investor base of 2,466 unit holders, it provides a more stable investment option compared to smaller funds. However, its bid-ask spread of N9.70 may affect frequent traders.
3. Guaranty Trust Equity Income Fund
This more conservative fund managed by Guaranty Trust Fund Managers delivered a 6.16% YtD return. With a strong NAV of N641.688 billion, the fund benefits from liquidity due to its low bid-ask spread of 0.03 and stable investor base of 479 unit holders.
4. Stanbic IBTC Aggressive Fund (Sub Fund)
While posting a 4.69% return in January, this fund’s longer-term growth potential remains strong, with a 47% return in 2024. Its large NAV of N800.123 billion adds credibility, though the high bid-ask spread of N108.67 may affect frequent investors.
5. Meristem Equity Market Fund
With a 4.56% YtD return, this fund has shown consistent growth, posting 37.21% in 2024. Its large NAV of N896.426 billion indicates investor trust, and its low bid-ask spread of 0.08 makes it highly liquid.
Key Takeaways for Investors
• High-Return Funds: Funds like Halo Equity Fund and Frontier Fund offer high returns but come with higher volatility.
• Stable Options: Guaranty Trust Equity Income Fund and Meristem Equity Market Fund offer balanced returns with less risk, making them suitable for more conservative investors.
• Risk vs. Reward: Investors should align their choice of fund with their risk tolerance, investment horizon, and liquidity needs.
The SEC valuation reports provide valuable insights into the current market trends and the performance of equity-based funds, helping investors make informed decisions.