By Goddy Egene
As investors review their investments in the Nigerian equities market in 2017, the THISDAY Model Portfolio (TMP) has ended the year with an aggregate return of 28.5 per cent. Given the fact that the TMP was introduced in the middle of the year, market analysts have said the 28.5 per cent return is highly impressive and points to the high skills and market intelligence adopted by the stockbroking firms involved in the TMP.
TMP is an initiative of THISDAY Economic and Financial Intelligence Unit (TEFIU), designed to enable leading stockbrokers and investment houses in the country share their trading skills and methodologies with ordinary investors. The investment houses involved in the project are Afrinvest Limited, FSDH Securities Limited, Capital Assets Limited, Meristem Limited and Lead Advisory Limited .
TMP consists of five different portfolio types constructed individually in conjunction with five leading stockbroking firms in the country with different investment objectives.
Each of the partner stock broking houses constructed a portfolio of 10 stocks selected according to their individual best judgement and using their best and well tested stock selection and investment strategies. Each of them then deployed an imaginary fund of N10 million to invest on the 10 stocks in whatever proportions they considered best.
Within six months of its deployment, the TMP recorded a growth of 28.5 per cent. This implies that the N50 million imaginary deployed , grew to N64.275 million.
However, an analysis of the individual portfolios showed that three of the portfolios recorded performance higher than the aggregate growth.
For instance, Portfolio C recorded a growth of 44.9 per cent, indicating that the N10 million deployed has grown to N14.489 million. Similarly, Portfolio B ended 2017 with gain of 42.2 per cent, implying that the N10 million has improved to N14.224 million, while Portfolio B closed the year with a growth of 33.1 per cent. This means the N10 million deployed improved to N13.312 million.
Portfolio A posted recorded a return of 21.7 per cent as the N10 million deployed has appreciated to N12.168 million. Portfolio E recorded the least growth of 0.81 per cent.
Some stocks in the individual portfolios soared above 100 per cent. For instance, Portfolio B has a stock that recorded a growth of 900 per cent, while another posted 184 per cent.
Portfolio C has a stock that posted a capital gain of 144 per cent and 126 per cent respectively. Also, Portfolio D has a stock that ended the year with a growth of 126 per cent, 98 per cent and 72 per cent, while Portfolio A has a stock that delivered 122 per cent return among others.