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Investing in Mutual Funds to Build and Manage Wealth

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Simpa Adaba

The process of wealth management is like tending a beautiful garden- you need to start with good soil and a good set of tools. Just as good soil has the proper fertility to nourish a plant, having the right foundation in financial literacy should empower you to potentially cultivate a successful investment portfolio.

Today, investing in Mutual funds is one of the best methods to build and manage wealth. Mutual funds often referred to as either collective investment schemes, unit trusts or funds, is a financial vehicle that allows various investors pool money together. It is usually managed by a team of investment professionals to create a greater buying power which in turn allows investors the opportunity to invest in a wider range of funds than would have been possible for individual investors.

Mutual Funds serve all types of investors with diverse portfolios. Depending on an investor’s need and priorities, there are many types of Mutual Funds but most prominent are four main categories – Equity (Stock) Funds, Bond (Fixed income) Funds, Money Market Funds and Hybrid Funds.

Equity or Stock Fund is a Mutual Fund that invests principally in stocks. In most cases, it focuses on a investment strategy; such as growth, value, large caps and small caps or themes such as property, energy and health care. The stock fund is in many ways ideal for investors with relatively little capital and people with little financial know-how.

On the other hand, Money Market Fund is a type of open-ended Mutual Fund that allows for short-term investments in debt securities such as Treasury Bills, Commercial Papers and Certificates of Deposit. It is often regarded as one of the safest and most stable securities available, and it is suitable for investors seeking short term investment.

Amongst the several benefits accrued to Mutual Funds investors, there are three key ones:

  1. a) Investors’ portfolios are exposed to a low level of volatility as investment risk is spread across many securities, b) Investors enjoy professional management. because the Funds are managed by financial experts with years of experience, so investors are almost certain that their investments are properly managed. c) Mutual Funds that are open-ended and priced daily are very liquid and can be redeemed promptly at the prevailing price of the Fund.

In as much as Mutual Funds are one of the safest investment options, we also acknowledge the risk. It is important that any individual looking to invest in Mutual Funds is aware of some of these factors. The Fund is affected by market movements. This means that the price may fluctuate in response to volatility in the market which invariably affects the component investments or underlying assets in the Fund

At Standard Chartered Bank, with as little as $100 for the Retail Savings Plan and $1,000 for the lump sum investment, investors can buy Funds which invest in the equities and bond markets around the world.

To buy a Mutual Fund, please visit any of our branches or download the SC Mobile app on your mobile device and start a plan today.

 

Simpa Adaba is the Head of Wealth Management at Standard Chartered Bank Nigeria Ltd.


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E-Financial

FG Makes u-Turn on Bank Account Re-Registration

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Federal government on Friday apologised for asking all account holders in financial institutions in the country to re-register their personal details.

FG makes u-Turn on Bank Account Re-Registration

Recall that the federal government had on Thursday ‎ordered that all persons holding accounts across financial institutions and insurance firms should complete and submit self-certification forms to their respective financial institutions.

The notice issued by the government to that effect read, ‎“This is to notify the general public that all account holders in Financial Institutions (Banks, Insurance Companies, etc.) are required to obtain, complete, and submit Self – Certification Forms to their respective Financial Institutions.

“Persons holding accounts in different financial institutions are required to complete and submit the form to each one of the institutions. The forms are required by the relevant financial institutions to carry out due diligence procedures, in line with the Income Tax Regulations 2019.‎”

The directive raised eyebrows, as account holders already possessed Bank Verification Numbers.

Following widespread condemnation that trailed the directive, the Federal Government backtracked on Friday, saying the fresh guidelin‎e was not for all Nigerians.

The government attributed the development to misinformation.

The clarification issued by the government on Friday read, ‎“We apologise for the misleading tweets (now deleted) that went up yesterday, regarding the completion of self-certification forms by Reportable Persons. The message contained in the notice does not apply to everybody. ‎FIRS will clarify Nigerians on the objectives of the directive.”

Also on Friday, FIRS, in a statement posted on Twitter, explained that the guidelines were only for non-residents, as well as people paying tax in more than one country.

Parts of the FIRS statement read, “The Self Certification Form is basically to be administered on Reportable Persons, holding accounts in Financial institutions, that are regarded as “Reportable Financial Institutions” under the CRS.

“Reportable persons are often non-residents and other persons, who have residence for tax purposes in more than one jurisdiction or country.”

“The information that indicates an account holder is a resident for tax purposes in more than one jurisdiction, is expected to be available to Financial Institutions during account opening processes, for the KYC and AML purpose.”


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Stanbic IBTC Bank Disowns Lagos ATM Fraudster

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Stanbic IBTC Bank PLC has disowned Tope Olajide, 22-year-old fraudster arraigned for theft of customers deposits.

Stanbic IBTC Bank Disowns Lagos ATM Fraudster

The Bank said this in a statement on Wednesday.

The statement said: “The attention of the management of Stanbic IBTC Bank PLC has been drawn to news currently circulating in the media, about the alleged arraignment of staff of the Bank on charges bordering on the theft of customers deposits.

“The Bank would like to clarify that the defendant, a 22-year-old Tope Olajide, IS NOT, and was at no point in time an employee of Stanbic IBTC Bank PLC.

“The alleged culprit was apprehended around 7:30 am, on Thursday, 27 August 2020, by security operatives after he was exposed by CCTV footage using ATM cards he had allegedly stolen and converted, to make withdrawals from the accounts tied to the stolen ATMs.

“The CCTV footage also showed the alleged culprit pretending to assist customers at ATMs whilst also attempting to fraudulently dispossess the customers of their ATMs.

“He was subsequently arraigned before an Ikeja Magistrate Court on Monday, 14 September, for stealing the debit cards of two customers and using them to unlawfully withdraw the sum of N427,000.

“The Bank would also like to implore members of the public to be security conscious when conducting transactions at ATMs. Customers are advised to report any suspicious actions around them to security operatives who are usually stationed around the Bank’s ATMs, when carrying out transactions at any of our ATM locations.

“As an organisation, we hold dear the values of integrity, and we will continue to prioritise the safety of our customers effectively.”


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Buhari Okays Establishment of CBN-Led Infraco

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President Muhammadu  Buhari has approved the establishment of an   Infrastructure Company (Infraco) to be driven by the Central Bank of Nigeria (CBN) in partnership with the African Finance Corporation (AFC) and the Nigerian Sovereign Investment Authority (NSIA).

Buhari Okays Establishment of CBN-Led Infraco

Mr. Godwin Emefiele, CBN governor

This is coming  on the heels of the foreign reserves’ slump to $36 billion following a cocktail of monetary policy interventions by the apex bank to cushion the scathing effects of the COVID-19 pandemic on the economy.

Mr Godwin Emefiele, CBN governor, made these disclosures in Abuja at the annual conference of the Chartered Institute of Bankers of Nigeria (CIBN) with the theme: Facilitating a Sustainable Future: The role of Banking and Finance.

According to him, Infraco would enable the use of private and public capital to support infrastructure investment that will have a multiplier effect on growth across critical sectors.

“This entity would also be able to raise funds from the capital markets and mobilise long term finance to address some of our infrastructure needs, while providing reasonable returns to investors. “We believe this well-structured fund can act as a catalyst for growth in the medium and the long run. The support of the banking community will be important in achieving this objective.

“A well-built infrastructure system, comprising hard infrastructure such as roads and ports, and soft infrastructure such as broadband penetration, can have a multiplier effect on growth by enabling the expansion of business activities in the country”, he explained.

On foreign reserves, Emefiele attributed its crash to the decline in foreign exchange earnings and subsequent adjustments in the value of the naira to the dollar.


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