Best performing dollar-denominated mutual funds YTD

As Nigeria’s inflation rate continues to erode the purchasing power of consumers amid the continual devaluation of the naira, Nigerians are now moving most of their investment portfolio to dollar-denominated mutual funds.

Consequently, fund managers in the country are now launching more US dollar-denominated funds, with a promise of a return of 5% per annum in order to tap from the rise in demand for such funds.

According to data from the Securities and Exchange Commission (SEC), the net asset value (NAV) of listed dollar-denominated funds stood at N502.83 billion as of 18th June 2021 compared to N479.77 billion recorded at the end of 2020.

This indicates an increased subscription of N72.33 billion in less than six months, with an additional listing of Emerging Africa Eurobond Fund at N607.75 million NAV.

Nairametrics analyses the best performing dollar-denominated mutual funds in Nigeria year-to-date. The prices of the 10 funds on our list, as of 18th June 2021 were compared to their prices as of the end of 2020.

A cursory look at the data shows that the prices of the funds grew by an average of 5.37% during the review period. Here are the best performing funds so far this year.

Cordros Dollar Fund – 5.87%

18th June 2021

Unit price – N43,778.58

YTD returns – 5.87%

Position – Fifth

Cordros dollar fund stood at N43,778.58 per unit, indicating a return on investment of 5.87% compared to N41,350.32 recorded as of December 2020. Its net asset value also grew by 63.5% in the review period.

FBN Nigeria Eurobond Retail USD Fund – 6.63%

18th June 2021

Unit price – N52,616.22

YTD returns – 6.63%

Position – Fourth

FBN’s retail USD Fund stands fourth on the list of the best performing dollar-denominated mutual funds year-to-date, having gained 6.63% in price to stand at N52,616.22 and recorded a 25% surge in its net asset value.

FBN Nigeria Eurobond Institutional USD Fund – 6.65%

18th June 2021

Unit price – N52,558.68

YTD returns – 6.65%

Position – Third

FBN Nigeria institutional Eurobond fund recorded a 6.65% increase in price from N49,283.56 recorded as of 31st December 2020 to N52,558.68 as of 18th June 2021. It printed a 63.5% increase in its net asset value during the review period.

Vantage Dollar Fund – 7.94%

18th June 2021

Unit price – N542.82

YTD returns – 7.94%

Position – Second

The fixed-income fund managed by Investment One Funds recorded a 7.94% increase in unit price to stand at N542.82 as of 18th June 2021, compared to N502.9 recorded as of 31st December 2020. Its NAV also increased by 5.9% to stand at N1.96 million.

Legacy USD Bond Fund – 7.96%

18th June 2021

Unit price – N409.7

YTD returns – 7.96%

Position – First

Legacy USD Bond fund managed by First City Asset Management is the best performing Nigerian dollar-denominated mutual fund year-to-date. It grew by 7.96% in unit price value, while its Net Asset Value surged by 23.2% to stand at N4.75 billion as of 18th June 2021.

Bubbling under

• Afrinvest Dollar Fund –
• FSDH Dollar Fund –
• Nova Dollar Fixed Income Fund
• United Capital Eurobond Fund
• AV GAM Dollar Fund

Why this matters

With Nigerians looking for alternative investment opportunities to hedge against currency volatility and galloping inflation, dollar-denominated mutual funds have proven to be the go-to investment so far this year, especially considering the downturn recorded at the Nigerian Exchange group with a YTD performance of -6.49%.