Top Performing Pension Fund Trustees in Nigeria – YTD October 2021

Stanbic IBTC, APT Pension and Veritas Glanvills topped the list of top performing PFAs in Nigeria between January and October 2021, posting average investment returns of 8.02%, 7.27% and 7.2% respectively.

This is according to the analysis carried out by Nairalytics, the research arm of Nairametrics on the 22 PFAs operating in Nigeria.

The Nigerian pension industry continues to increase returns, albeit in the single digits, as competition continues to toughen, as evidenced by the number of RSA contributors who have changed PFAs since the window opened of transfer.

According to data from the Nigerian Pension Commission (PENCOM), a total of 35,719 contributors switched PFAs between January and September 2021, following the 2,799 contributors who switched last year immediately after the transfer window opened. .

This has increased the level of competition in the industry as they try to outdo each other by recording gains in their various fund categories. However, due to the challenges facing the Nigerian economy, as a result of the covid-19 pandemic, it has become more difficult for fund managers to record double-digit gains in terms of return on investment capable protect against an inflation rate of nearly 16%. %.

A look at the equity market shows that at the end of October 2021, the market could only manage a 4.39% gain since the start of the year, affected by a tumultuous first half.

Nairametrics presents a ranking of the best performing pension funds between January and October 2021, you can read the previous ranking on the best PFAs since September 2021 and the best PFAs in the third quarter of 2021.

where does the money go

According to the Pension Fund Industry Report for September, Nigeria’s pension fund assets reached their all-time high at N13 trillion as of September 30, 2021, as the new pension fund Shariah Compliant (Fund VI) has added N7.6 billion to the industry assets.

Another breakdown of the report shows that 63.2% (8.22 trillion naira) of total net assets were invested in FGN securities, most of which were in bonds. This is quite a cautious move on the part of Nigerian PFAs given the less risky nature of FGN securities for investors, however, its yields are generally in the mid-single digit region.

A quick review of bond offerings by the DMO shows that two- and three-year FGN savings bonds maintained single-digit yields throughout the year, although they are starting to see some level of weakness. increase compared to the beginning of the year in which they were issued. at 4.214% and 5.214% respectively.

Notably, the recently auctioned bond bids for November 2021 were announced at 7.376% and 8.376% pa for 2- and 3-year FGN savings bonds respectively.

On the other hand, 17.6% of the PFA funds were invested in local money market instruments at N2.29 trillion, which include bank investments and commercial paper. The pension industry invested a sum of 116.84 billion naira in mutual funds in September 2021, which represents a drop of 27.6% since the beginning of the year.

This could be attributed to the not so good performance of Nigerian mutual funds so far in the year. Nairametrics’ recent ranking of Nigerian Mutual Funds shows that only 56.5% of the 131 registered funds recorded gains in the month of October 2021, with an industry average ROI of 1.66%.

Overall best performing PFAs year-to-date

The average overall ROI for the period stood at 5.05% in October 2021, while RSA Fund IV was the best fund category in the period under review with an ROI of 5.76% between January and October 2021.

Stanbic IBTC, APT Pension and Veritas Glanvills Pensions topped the list of best performing PFAs year-to-date in terms of overall performance.

Third position: Veritas Glanvillls Pensions Limited

Year-to-date returns – 7.2%

Second place: APT Pension Fund Managers Limited

YTD returns – 7.27%

First Position: Stanbic IBTC Pension Managers Limited

YTD returns – 8.02%

Nairalytics

Best PFAs by Fund Category

RSA Fund I

Stanbic IBTC topped the list of top PFAs in the Fund I category with a return on investment of 10.38%, followed by APT Pension (9.74%) and ARM Pension Managers with a return of 6.48%. On average, the fund category posted a return on investment of 4.25% during the period under review.

Naturally, the fund is the riskiest of the funds considered. The fund is designed for active contributors aged 49 and under, primarily with the aim of maximizing investment returns by diversifying 20% ​​to 75% of funds into income instruments.

Although contributors can switch from this fund to fund II or III once they reach the age of 50.

Third position: ARM Pension Managers Limited

YTD returns – 6.48%

Second position: APT Pension Fund Managers Limited

YTD returns – 9.74%

First Position: Stanbic IBTC Pension Managers Limited

YTD returns – 10.38%


RSA Fund II

RSA Fund II posted year-to-date returns of 5.03%, led by APT Pensions with a return on investment of 9.97%, followed by Sigma and Tangerine Pensions with respective returns of 8.21 % and 7.75%. This fund is also a risky category since approximately 10% to 55% of the funds may be invested in variable income instruments.

This is a default fund for contributors aged 49 and under and active contributors can switch to Fund I depending on their risk appetite. It should be noted that Fund II, with a contributors fund of N5.67 trillion, accounted for the largest share of the total net assets of the pension industry in September 2021.

Third position: Tangerine Pensions

YTD returns – 7.75%

Second position: Sigma Pensions Limited

YTD returns – 8.21%

First Position: APT Pension Fund Managers Limited

YTD returns – 9.97%

Others on the list include Veritas Glanvills (7.63%), ARM Pension (7.6%) and Trustfund Pensions with returns of 7.55%.


RSA Fund III

Fund category III has recorded a return on investment of 5.49% since the beginning of the year, second only to RSA Fund category IV. The list was led by Tangerine Pension with 7.72% ROI followed by Veritas Glanvills Pensions and ARM Pension Managers with 7.59% and 7.4% respectively.

It is a conservative fund with only around 5% to 20% invested in variable income instruments. This is a fund for contributors aged 50 and over. Although contributors can switch to Fund II, upon request.

Third position: ARM Pension Managers Limited

YTD returns – 7.4%

Second position: Veritas Glanvillls Pensions Limited

YTD returns – 7.59%

First place: Tangerine Pensions

YTD returns – 7.72%

Others include Trustfund Pension (7.19%), Sigma Pensions (7.13%), First Guarantee Pension (7.09%) and Stanbic IBTC with returns of 7.06%.


RSA IV funds

The very conservative fund has posted a year-to-date return of 5.76% in October 2021, indicating the best performing fund category in the period under review. Meanwhile, the top performing PFAs in this category were First Guarantee Pension, Sigma Pensions and Veritas Glanvills Pensions with 8.52%, 8.35% and 8.05% ROI respectively.

This category of funds is only open to retirees and mainly to conservatives. Contributors to this fund cannot switch from this fund to another fund. Approximately 10% of the fund may be invested in variable income instruments.

Third position: Veritas Glanvillls Pensions Limited

YTD returns – 8.05%

Second position: Sigma Pensions Limited

YTD returns – 8.35%

First place: First Guarantee Pension Limited

YTD returns – 8.52%

Others include Stanbic IBTC (7.4%), Trustfund Pensions (7.19%) and Leadway Pensure PFA with returns of 7.15%.


How we determine top performers

  • The percentage difference between the bid price on the last day of the reporting period and the bid price on the last day of the previous year gives us our year-to-date returns.
  • This is done in all fund categories where prices are published.
  • Bid prices and other related data are obtained from the websites of all pension funds provided they are published on their websites on the day they are entered.
  • For this ranking, we obtained information from the website of all PFAs except Crusader Sterling Pension and Fidelity Pensions, whose information we were unable to obtain at the time of writing this report.
  • All efforts to obtain data from both PFAs have failed at press time.

Contact [email protected] with any questions regarding this publication.

Dolores W. Simon