It is official. The total asset value of mutual funds in Nigeria has hit the trillion Naira mark, according to the recent report by the Securities and Exchange Commission. What a milestone!
In my April 2019 article on the state of the mutual fund industry in Nigeria, I projected that the asset value would hit the trillion Naira mark before the end of the year, going by observable trends as at that time. And here we are.
NAV summary report
The recently released NAV Summary Report by the Securities and Exchange Commission of Nigeria indicates that the total Net Asset Value of mutual funds in Nigeria is now N1,017,705,544,066. Who could have imagined that what started in 1991 with Paramount Equity fund as the only mutual fund in Nigeria, could balloon to an industry with over 100 funds and total asset value in trillions of Naira? A historical movement along memory lane shows that as at December 31, 1991, the total net asset value of mutual funds in Nigeria was N17.5 million in an industry of one mutual fund.
Fund manager ranking by asset value
The dynamics remain the same as Stanbic IBTC sits atop other fund managers as the fund manager with the largest asset under management, AUM. On the day that total mutual fund assets hit the trillion Naira mark, Stanbic IBTC housed 44.54% of that total. Again, FBN Capital Asset Management company retains its second position with 19.05% of Nigeria’s total mutual fund asset value. Once again, Asset and Resources Management company, ARM, is the third-largest fund manager with 8.10% of total assets of mutual funds in Nigeria, while Chapel Hill Denham Management limited took the fourth position from FSDH Asset Management company with 4.4% of mutual fund assets.
Too large to fail
If things continue the way they are, it would not be a surprise if Stanbic IBTC controlled 50% of Nigeria’s mutual fund assets. That should start to concern the regulatory authorities and they should begin to look at issues like too large to fail, in Nigeria’s mutual fund industry.