Fixed Income Funds (Business Opportunities - Investment)
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Item ID 3825539 in Category: Business Opportunities - Investment
Fixed Income Funds | |
Why you should use a Fund Manager in a Declining Fixed Income Yield Environment Hunting for Yield The outbreak of COVID-19 and its impact on the global economy has made the investment environment unpredictable. By tweaking the approach to monetary policy amid a decline in foreign investor interest in Nigeria, the central bank of Nigeria set yields on government securities significantly lower over the last four (4) months. In the meantime, the inflation rate has risen for 10 consecutive months to 12.56% in June. This means that the returns on virtually all instruments in the local fixed income market are below the inflation rate. Fixed income investors are therefore seeking alternative instruments that can offer superior yield. Cultivating a relationship with a local fund manager could offer several advantages to investors in this season. Unearthing Opportunities One service that a portfolio manager can offer clients is the expertise to spot opportunities. For example, portfolio managers do not only monitor local currency investments, but they often explore foreign currency investment opportunities. The attractive yields offered in the Nigerian Eurobond market is an example of an opportunity that many investors are unaware of. However, some securities in the Eurobond market are currently delivering higher yields than local currency instruments with similar tenors and risk profiles. Diversification is Good Advice While the Eurobond market may offer more attractive returns, investors should embrace a culture of diversifying their portfolio in this season. The search for higher yields could tempt some investors to stake their bets in higher yielding securities but at the cost of the higher risks related to the volatility of returns or the liquidity of the instrument that they may consider. It is the fund manager’s job to review the client’s investment objectives in the context of the economic circumstances of the client. This points to one value of signing up to a discretionary portfolio management agreement with a fund manager. However, there are other benefits to ceding the management of your portfolio to a professional. | |
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| Target Prov.: All Provinces Target City : All Cities Last Update : Feb 22, 2024 8:09 AM Number of Views: 30 | Item Owner : FBNQuest Contact Email: Contact Phone: 01-2801340-4 |
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2024-05-06 (0.390 sec)