The Fund Manager of the United Bank for Africa (UBA) Mutual Funds, Mr. Bawo Oritsejafor, has advised capital market investors to invest in mutual funds so as to take advantage of the quality of advice and investment decisions they take.
Oritsejafor who spoke at the 2012 Annual General Meeting of the UBA Asset Management Limited in Lagos also argued that investing in mutual funds is preferable to being a retail stockholder because of the pool of resources.
“Mutual Funds are managed by professionals who have skill and expertise to make the right choices on behalf of their unit holders. Fund Managers are also in a position to give better advice to the unit holders and they will be able to make better returns on their investment, than them going to the market themselves,” he said.
The UBA Asset Management has four mutual funds - UBA Money Market Fund, UBA Balanced Fund, UBA Bond Fund and UBA Balanced Fund.
Commenting on the performance of the funds, he explained: “Given the volatile market conditions in 2011, investors’ appetite for shares was affected by development in the financial market and the preference of institutional investors for fixed income securities.
“Since some of our funds have equity components, we had to focus on the fixed income portion and as much as possible, do little of equities. This strategy paid off and three of the Funds were able to do dividend distribution to our unit holders.
“The fund that did not pay dividend was the Equity Fund because primarily 60 per cent of it was invested in equities.”
The annual results showed that while UBA Money Market Fund, which opened the financial year with an offer price of N1.1331, closed at N1.1428 after adjusting for the payment of 12 kobo dividend, the UBA Balanced Fund which had offer price of N1.3182 at the beginning of the year, closed at N1.1506 after adjusting for the payment of 10 kobo dividend.
Also, the UBA Bond Fund closed the financial year N1.2634 after adjusting for the payment of 10 kobo dividend, thereby depreciating by 2.5 per cent, just as the UBA Balanced Fund stood at N1.1506 at the end of the year.