Mutual funds: SEC advocates retail participation, projects N1.5trn growth

THE Securities and Exchange Commission (SEC) has expressed optimism that Collective Investment Scheme (CIS) or Mutual funds in the capital market would hit N1.5 trillion before the end of the year, urging more retail investors in the segment.

Ms Mary Uduk, acting Director-General SEC, stated this over the weekend at the Capital Market Correspondents Association of Nigeria (CAMCAN) forum sponsored by the commission in Lagos.

CIS also known as Mutual Funds is an arranged pool of funds managed on behalf of investors by a professional money manager which may invest in; ventures capital, portfolio of stocks Bonds and other securities.

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Uduk, who was represented by the Head, Office of Economics at SEC, Mr Okey Umeano, said the commission was setting up more strategies to develop the mutual fund segment in the Nigerian capital Market, adding that the segment which currently stands at N1.2 trillion was growing and urged retail investors to use the funds as a means to access the market.

“In any advanced market, the Collective Investment Scheme form a very big part of the market. We at the commission have discovered that some of the investors who lost their savings during the crisis in 2008 are low on confidence.

“That is the reason why we are encouraging retail investors to go through these mutual funds because they are set up and approved by capital market operators and the SEC and the SEC regulates them (operators).

“Currently the size of the segment stands at N1 trillion but we expect it to grow much higher. So we are urging retail investors and high networth investors to use the mutual funds route to enter the market”, Uduk said.

Corroborating her, Divisonal Head, Economic, Research and Policy Management, SEC,  Dr Afolabi Olowookere, noted that the commission expects to see a significant rise of N1.5 trillion or N2 trillion in mutual funds.

Olowookere noted that about 480,000 investors had keyed into that the investment segment.

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“We still expect that size to get to N1.5 or N2 trillion and the reason is because it provides an avenue for retail investors to buy. The mutual fund may not have very high return but definitely it won’t have low return and with the SEC at the forefront of financial inclusion, we are pushing collective investment scheme because it brings some form of stability for investments.

“The number of units of account in that segment currently stands at 480,000 investors and it would likely increase”, he said.