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The rebirth of mutual funds – United Capital Wealth for Women Fund

The rebirth of mutual funds - United Capital Wealth for Women Fund

Jude Chiemeka

The rebirth of mutual funds – United Capital Wealth for Women Fund

United Capital Wealth for Women Fund
The first fund discussed was the United Capital Wealth for Women fund. According to Mr. Chiemeka, the primary objective of the fund is to foster female inclusion and involvement in the financial system. The fund is also unique in that it focuses on meeting the most important investment needs that most women desire – safety. The principal ideology is that the fund will support companies with significant women representation on their board and management teams. Recent studies across the globe are showing that these companies tend to generally outperform those with less women representation.

The Wealth for Women Fund is projected to pay dividend on a regular basis, assuring investors of a steady stream of income while the Net Asset Value (NAV) of the fund continues to grow. Savvy investors have the option to re-invest their dividends, compounding interest in the fund; or pull dividends out as they come.

How much do investors need to subscribe to the WWF?
“The fund requires a minimum investment N10,000 which immediately contributes to creating opportunities for female inclusion, encourages small business owners and entrepreneurs across Africa and in diaspora. We’ve deliberately made the entry point reasonable to allow a wide range of investors to partake in this opportunity.”

Fund Offering
Chiemeka maintained that though income levels of women have been on the rise in Nigeria and Sub-Saharan Africa, the uncertain economic climate across the continent is a major source of concern. “This Fund looks to help assuage those fears by focusing on two key areas: safety of funds and long-term capital growth. The fund will give investors the opportunity to preserve their investment and achieve long-term capital growth and higher return. Invariably, it will work to help women save and turn their savings into a viable investment vehicle,” stated Jude Chiemeka.

Chiemeka was also keen to highlight the fact that women were significantly represented in some of the most capitalized companies in Nigeria. “Female representation on the boards of such companies as UBA, IBTC Holdings, Unilever, Access Bank, Lafarge, GTB, Nestle, Dangote Sugar has steadily been increasing. While this is commendable, we anticipate continued growth in those numbers which is a great part of the reason we created the United Capital Wealth for Women Fund.”

The United Capital Nigerian Eurobond Fund
The other newly launched Fund we discussed was the United Capital Nigerian Eurobond (USD) Fund. The primary objective of this fund is to achieve capital appreciation in the short to medium term for investors with USD or convertible currencies. It is designed to deliver significantly higher returns than what is obtainable from the average domiciliary account in local Banks.

Chiemeka politely started the discussion by asking what we thought the future exchange rate for the dollar would be. We didn’t have an answer. He shared that 20 years ago, the exchange rate was N22 to $1, while today its N455 to $1.

For investors who have future dollar obligations like school fees, medical bills, mortgages etc. he advised that they will be in a better position to invest their monies in this fund which takes away the volatility in FX. Then to address investors who have monies in domiciliary account, he shared that the returns from those accounts cannot be compared to leaving your funds in the Nigerian Eurobond Fund.

Why can’t I invest in the Eurobond myself? Why do I need to subscribe through you?
“The cost of investing in a Eurobond as an individual investor is very high with the minimum ticket for an individual investment falling in the range of $100,000,000 in the capital market issuance. Investments are expected to be held in a Euro clear account which attracts custody fees, which are also with significant costs. So you can invest as an individual but it is a lot more cost-effective to subscribe through the Fund.”

How can I benefit from subscribing?
“When you invest $1000, you stand the opportunity of getting returns in the region of 3-8% without the cost of custody which is held directly by the Fund. And ultimately, you will be enjoying better return for your dollar as opposed to holding that money in a domiciliary or foreign account.”

How much do I need to subscribe?
“The minimum investment you can make is $1,000 (10 units at USD$100 per unit)”

Fund offering
Chiemeka shared that this particular Fund is targeted at those with domiciliary accounts, Africans in Diaspora, High Net Worth Individuals (HNI) and Institutional Investors who desire the exposure to dollar denominated fixed income securities. This enables the investors to attain the objective of capital growth and competitive returns.

Once purchased, every unit holder is entitled to a certificate as evidence of their title to the number of units specified on such document, and redemption is possible after a 90 days minimum holding period enabling an easy exit.

To further support the legitimacy of the Funds, the MD reiterated that both funds are duly registered by Securities Exchange Commission (SEC) and will be listed on the Nigerian Stock Exchange (NSE) and Memorandum to provide visibility. Beyond registration with the regulatory authorities, United Capital’s fund managers are required by law to invest in the same fund 5% of the fund value to show commitment and a dedication to maximizing shareholder value.

In closing, for any investor trying to make an informed decision, there are various reasons why these funds look absolutely attractive. Apart from capital preservation and competitive return on investments, as earlier mentioned, with such a well diversified asset class and experienced management team, United Capital’s two new funds are a worthy investment.

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