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The Group Managing Director of Cordros Capital Limited (CCL), Wale Agbeyangi has flagged off the public subscription of two target-date mutual funds being promoted by its subsidiary, Cordros Asset Management Limited (CAML).
A target-date fund is a fund offered by an investment company that seeks to grow assets over a specified period of time for a targeted goal. Target-date funds are usually named by the year in which the investor plans to begin utilising the assets. The funds are structured to address a capital need at some date in the future, such as retirement.
Explaining more during a recent Breakfast meeting in Lagos, Agbeyangi said his group is pioneering the offering of these funds in Nigeria through the Cordros Milestone Funds 2023 and 2028 and the funds which opened for subscription on Monday, June 18 and will close on July 27, 2018.
Otherwise, CAML is offering 5,000,000 units of N100 each and minimum amount required to subscribe to the fund is N2,500 (25 units)and investors can make an additional investment of 10 units or more thereafter.
In his presentation, he averred that “The Cordros Milestone Funds 2023 and 2028 are target-date mutual funds, which pursues a long-term investment strategy to manage the asset allocation (mix of asset classes) of the fund, to become more conservative as the target dates (2023 & 2028) approach.
“Globally, target -date mutual funds have become increasingly popular and at the end of 2017, the Investment Company Institute (ICI) estimated a total of $1.1 trillion was invested in these funds worldwide.
“It is surprising but also laudable that The Cordros Milestone Funds 2023 and 2028 are the first set off target-date mutual funds to be launched in Nigeria.
“This represents a significant achievement for not just Cordros but the entire capital market. The funds which are initiatives of our asset management subsidiary is a strategic move aimed at providing products which cater to the retail segment of the economy.
“These are specially designed to provide for individuals and corporations saving towards a ‘target.”
Earlier in his remarks, Acting Chief Executive Officer of CAML, Leye Adekeye observed that “We are indeed excited at the prospects that the funds hold. The milestone funds are balanced funds and will have a mix of equities, fixed income and money market instruments.
“The funds will start out seeking capital appreciation and will become more conservative by seeking capital preservation towards their target dates.
“Opportunities abound in the capital markets and these funds will ensure we are leveraging these opportunities and providing diversification for our clients.
“We will like to encourage individuals saving towards different goals and targets to take advantage of the professional fund management when the offer opens,” he said.
He stressed that CAML, a wholly owned subsidiary of CCL, and by traded on the floor of the Nigerian Stock Exchange (NSE), has competent risks management team and techniques like the stock plus tools amongst others to guarantee safe return on investment (ROI).
Adekeye noted that “The investments that has the risks characteristics in the funds has a limit to which we can put in there, and the highest risks for equity is about 65 per cent and as low as 5 per cent, that’s if we think it is necessary to reduce it, so we have between 5-65 per cent equity risks, so we can adjust equity as time or risks permits”.
In his submission, he revealed that the price of each Unit of investment is not linked to the market itself but to the performance of the investments like the money market, fixed income and some equities, noting that investors should expect more liquidity funds and a seamless return on investment on maturity.