Asset managers create diversification options for investors

Cordros Asset Management Limited (CAML) has completed all necessary arrangements for its proposed Milestone Funds 2023 and 2028, following the clearance of its offer documents by the Securities and Exchange Commission, as part of efforts to provide opportunities for investors to diversify their portfolio and hedge against market uncertainties.

The Cordros Milestone Fund 2023 and 2028 are open-ended funds, authorised and registered in Nigeria as Unit Trust Schemes under Section 160 of the Investment and Securities Act.

The introduction of the fund is a strategic move aimed at providing products, which cater to the retail segment of the economy and specially designed to provide for individuals and corporate organisations with a target savings.

The Group Managing Director of Cordros Capital Limited, Wale Agbeyangi, at the unveiling of the plan in Lagos, said, the Cordros Milestone Fund 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.

According to him, the Funds objectives are to maximise total returns and reduce volatility as the Funds approach their target dates (2023 & 2028). He pointed out that the investment focus is initially on growing assets and shifts towards capital preservation to manage future income risk.

“ As the Funds gets closer to their target dates, the asset allocation shifts to reflect shorter investment time horizons. The minimum amount required to subscribe to the fund is N2,500 and investors can make an additional investment of 10 units or more. 500 million units at N100 per unit for each Milestone Fund will be offered to investors for subscription at the launch of the fund.

“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 Fund 2023 and 2028 are the first set of 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’,” he added.

The Acting CEO, Cordros Asset Management Limited, Leye Adekeye said: “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.”

He added: “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.”