By Aminu Imam
The total value of mutual funds investment rose by N23.67bn or 15.7 per cent at the end of 2014.
At the end of trading in 2013, the value of investment in mutual funds, also known as Collective Investment Scheme (CIS), closed at N153.83bn.
A report, obtained from the Securities and Exchange Commission (SEC) on Friday, showed that the value closed at N174.50bn at the end of last year.
SEC, with the Nigerian Stock Exchange (NSE) and market operators, had in the last few years emphasised the wisdom of diversification through investment in mutual funds.
The CIS, usually managed by a fund manager, involves collecting money from different investors that have a common investment objective and reinvesting such funds.
It is a form of investment that is accessible to all, where each investor has a proportional stake based on how much money they have invested in the pool of funds.
The fund manager invests the money by buying treasury bills, stocks, bonds, or other securities, according to specific investment objectives that have been established for the scheme.
The Chief Executive, Stanbic IBTC Bank, Mr. Yinka Sanni, said mutual funds could also be beneficial to short-term investors, giving them the leverage to withdraw from the funds at a short notice when there is a pressing need.
“Investing in mutual funds are ideal for conservative investors attempting to optimise cash balances that may be required in a short period of time, as it usually has a capable investment management team with good level of experience and a well established investment process,” he stated.