The Nigerian stock market started the year on a positive note, with the All-Share Index (ASI) posting a 1.53% gain in January 2025.
This performance, though modest, sets the tone for equity-based collective investment funds, whose returns are largely tied to the performance of individual stocks in the market.
Equity-based funds, by their nature, invest in stocks, and their performance tends to mirror broader market trends.
One key advantage of investing in equity-based funds over individual stocks is diversification, which helps mitigate risks by spreading investments across multiple stocks, reducing the impact of poor performance from any single company.
Additionally, these funds benefit from professional management, as experienced fund managers actively research and adjust portfolios, making informed decisions that individual investors may struggle to replicate.
Their ability to outperform or underperform the broad market or underlying stocks depends on their portfolio composition, asset allocation, and risk management strategies.
According to the Securities and Exchange Commission (SEC) valuation reports of December 2024 and January 2025, some funds outperformed the ASI. Below are the top performers in terms of Yield (YtD) in January 2025
Halo Equity Fund: – Yield (YtD 110.79%)
Topping the list of best-performing funds in January 2025 is the Halo Equity Fund, managed by Halo Asset Management Limited.
Hallo Equity Fund is managed by Halo Asset Management Limited. Halo Asset Management Limited offers a variety of financial services, including Naira and USD investment options, savings accounts, and loans. They also provide Shari’ah-compliant investment products.
Following closely behind is the Frontier Fund, managed by SCM Capital Limited, with an impressive YtD yield of 72.24% in January 2025, after posting 63.74% in 2024.
They offer a range of services, including asset management, capital issues, financial advisory, and structured finance
A more conservative performer is the Guaranty Trust Equity Income Fund, managed by Guaranty Trust Fund Managers, a subsidiary of GTCO.
The Stanbic IBTC Aggressive Fund, another well-established fund, delivered a 4.69% return in January 2025, following an impressive 47% YtD return in 2024.
The management by Stanbic IBTC, a highly reputable asset manager, adds credibility and investor confidence.
Rounding off the top five is the Meristem Equity Market Fund, managed by Meristem Wealth Management Limited.
Rounding off the top five is the Meristem Equity Market Fund, managed by Meristem Wealth Management Limited.
Moreover, a low bid-ask spread of 0.08 ensures good liquidity and minimal transaction costs. With 419 unit holders, the fund maintains a reasonable level of investor diversification, reducing volatility risks.
The Securities and Exchange Commission (SEC) valuation reports provide investors with crucial insights into the performance of equity-based collective investment funds.
While past performance does not guarantee future results, it offers valuable trends that investors can analyze.