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The Mutual Fund Most Of Us Embrace



Mutual Fund is also called a unit trust; it is a situation where financial experts invest the money of many people in many different companies. It offers a selection of equity, fixed income, and real estate investments. This mix of assets provides optimum balance between risk and return and therefore assures long-term financial rewards.

Mutual fund is known to be managed by a well-organized body of experts in the area of finance and investment. Because it’s a global thing, West Africa is not left out.
In Nigeria, for instance, there are many mutual fund managers but the most famous is ARM Investment Managers_ an organization that has spread through Nigeria like forest fire with offices in Lagos, Ibadan, Abuja, Port-Harcourt, etc. ARM Investment Managers has known to be very strong and reliable with its Mutual Fund management titled: Discovery Fund.  The primary aim is to provide a financially secure future.     
As mentioned earlier, most mutual fund managers focus on equity, fixed income and real estate.


  • ·         Equity is the value of a company which is divided into many equal parts owned by shareholders. Although the returns on equity investments tend to be more attractive over the long-term, investing in equities carry some amount of capital risk. Periods of stock market declines may, therefore, have a negative impact on the value of investment. 



  • ·         Fixed income, as the name suggests, is a kind of investment that generates unchanging amount of returns in relation to amount invested. According to ARM Investment Center description, "It is useful to understand the terminology of fixed-term investments: 


    • The principal is the amount that is being lent
    • The coupon is the interest rate that will be paid
    • The maturity is the date by which the capital sum must be re-paid
    • The issuer is the company or Government issuing the instrument"


  • ·         Real estate is an investment channeled towards the acquisition of property such as land or building that tends to appreciate within some certain course of time. An article on entrepreneur website mentioned cash flow, appreciation, and some other 6 Benefits of Real Estate Investment.


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ARM MUTUAL FUND SAMUELDPOETRY

The reasons most people direct their hard-earned money to mutual fund are possibly because mutual fund offloads the burden from the investors, creates a means for a single investment to play in multiple business grounds, and doesn’t cost fortune to participate (minimum of 5000 naira in Nigeria) unlike buying directly into some companies’ equity which cost tens of thousands or millions of naira. 

There are pros and cons to everything; one of the cons of mutual fund in unearthed as follows: “Some funds (mutual fund managers) impose shareholder fee directly on investors whenever they buy or sell shares. In addition, every fund has regular, recurring, fund-wide operating expenses. Funds (mutual fund managers) typically pay these costs. Seemingly negligible, fees and expenses can substantially reduce an investor’s earnings. For the reasons cited above, it is important for a prospective investor to compare the fees of the various funds (mutual fund managers) under consideration.” [Excerpt from a wikipedia article]

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Another concern of prospective investors is the worry about the impact of daily rising inflation on their invested money. There should be limited worries as regards inflation at the sight of mutual fund_ this present era of our, such David has been designed to conquer Goliath. A particular marketwatch article says and I quote “These inflation-fighters come in many flavors and strategies, from so-called real return funds to inflation-protected bond funds and bank-loan funds”. Another reasonable proof is the chart below.

Discovery Fund of ARM Investment Managers performance compared to Treasury Bills, the Nigerian Stock Exchange and inflation as of 31-12-2005.


NSE
DISCOVERY FUND
INFLATION
TREASURY BILLS
1 YEAR
1.0%
7.20%
17.90%
7.80%
2 YEARS
98.44%
73.37%
67.33%
41.82%
5 YEARS
196.95%
116.84%
124.62%
98.69%
7 YEARS
473.88%
393.88%
204.86%
220.53%
10 YEARS
373.00%
368.39%
299.85%
282.38%
11 YEARS
992.32%
766.65%
598.30%
330.18%

Maintaining a very reliable team can always assure achievable goal. A visit to the ARM Investment Website will give a comprehensive understanding of How The Discovery Fund Works. 

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