- What is a Mutual Fund (or Unit Trust)?  

A mutual fund (or unit trust) is an investment vehicle that pools the money of many individuals to invest in stocks, bonds, money market securities, real estate or some combination of these. The investors’ contributions to the mutual fund are invested and managed on their behalf by professional investment managers. Each investor becomes a unit holder, i.e. a part-owner of the fund. The units held give the investor the right to participate in any profits or income derived from the fund’s investment.

- Can you explain the nature of the components of the Mutual Fund?

Money Market Fund: This Fund invests primarily in short-term market securities of governments, banks and corporations. The instruments include BAs, CPs, Treasury Bills, Bonds, etc.
Equity Fund: Equity Fund invests primarily in stocks or quoted equities on the Nigeria Stock Exchange. It also holds a small proportion of fixed-income or other types of securities to ensure liquidity at all times.
Bond Fund: This Fund’s investments are concentrated in corporate bonds, treasury bonds, mortgaged-backed bonds, and government bonds. Examples are the Federal Government Bonds currently on issue. It also holds small proportions of other forms of investment to ensure liquidity.
Balanced Fund: This Fund holds equities and other fixed income securities in relatively small proportions to diversify unsystematic risk in the portfolio. It is an investment mix of all other Funds in the same proportions.

- Who decides what stocks to buy and sell? Can I?

No. All investment management and administrative decisions are the responsibility of the Manager of the Fund (UBA Asset Management Ltd), whose activities are guided by the Fund’s Trust Deed. All investments would be reviewed and approved by the appointed Trustee to the Fund (Union Trustees Ltd).
 

- Will my investment in the Mutual Fund be guaranteed?

Although investing in equity securities offers an opportunity for achieving superior returns over the long term, the value of your investment in the Fund will fluctuate in line with the performance of the underlying assets. Periods of stock market boom could therefore have a positive impact on your investment, just as periods of decline in the Capital Market could have a negative impact on it.

- Why is the Fund preferable to direct stock market investment?

First, investors in the Fund will have the benefits of professional management, low transaction cost, an attractive yield, and a diversified portfolio of securities, for the Fund is invested in several blue-chip companies at the same time. This old-age wisdom of not putting all your eggs in one basket ensures that the investor’s risk is minimized. Secondly, investors with relatively small amounts would have access to those markets not ordinarily accessible to them

- How liquid is my investment?

The Fund is liquid enough, for investors may redeem their holdings from the Fund Manager within 5 business days from the date of the redemption request, at the prevailing bid price quoted on the Memorandum listing of the NSE.

- Who is the Mutual Fund for?

The Fund is appropriate for investors seeking to establish long-term savings, such as retirement benefit plans, savings plans to finance children’s education, or savings plans to finance the acquisition of specific assets. The Fund can also be used to establish contingency plans in case of emergencies as well as to achieve other long-term financial objectives. Accordingly, individuals as well as institutional investors such as PFAs, trust companies, insurance companies, banks, government parastatals, investment clubs, Associations, Non-Resident Nigerians and foreign institutional investors are eligible to invest in the Fund.

- Can I, as an individual, invest in the Funds at anytime?

Certainly. The Funds are open-ended, so investors are able to make initial, or additional or periodic investments at anytime at the prevailing offer price quoted on the Memorandum listing of the Nigeria Stock Exchange

- What is the difference between the Bid Price and the Offer Price?

The Bid Price is the price at which the Fund Manager will buy a unit from an investor for redeemed units, while the Offer Price is the price at which initial or additional units of the Fund are purchased by an investor from the Fund Manager after the initial offer period has closed.

- What is the minimum investment sum?

The initial minimum is N50,000 (Fifty Thousand Naira).

- How can I monitor my investment?

Daily Bid & Offer Prices will be quoted on the Daily Official List of the Nigerian Stock Exchange. These prices will also be available in national newspapers and the internet at:
www.ubaassetmanagement.com;

- As an investor, do I get a certificate?

Certificates are issued for units held.