PFAs with Highest Yields (January – September 2017)

By: Abayomi Obabolujo

Retirement is a lifetime adventure. Of so much importance it is that living depends on it at old age. So is its planning which includes most prominently, savings and investment. Technically speaking however, every long-term savings plan and investment must of necessity incorporate to a large extent, not just the security of the contributions but also the growth element. In other words, the need to note, access, review and adjust short term performances of your savings and investments geared toward secured retirement is as important as the long term expectations in itself. This is the more reasonable as much as necessitated by the notorious acts of major enemy of money called inflation. It behooves therefore, on every savers in any form of retirement scheme to keep tab on short term performances of such platforms and take decisions appropriately, as soon as possible.

Figures don’t have emotions more so when dished out by the individual institutions. Seeing that contributory pension plans take the lead in retirement savings, though it is highly regulated for security purpose, the need to tracking performances of major pension funds administrators even in the short term can’t be overemphasized more so as regulation demands that basic performances of both the retirement savings account (RSA) funds and the Retiree funds are made public.

CONTRIBUTORS’ ATTITUDES

Much as most pension funds administrators strive to comply with regulations, disappointedly, most pension contributors rarely follow up on performances of their funds.

In samples among pension contributors in Lagos, Ibadan, Akure and Abuja undertaken by Stockswatch, it could be deduced that most contributors are mostly nonchalant about the state of their savings as most contributors discard the monthly notes often sent to them by the administrators without even opening the envelope while those that seem to, do not have any form of comparative metrics to determining the performances of the current administrators and others in the industry irrespective of the availability of such.

BENCHMARKING RSA/RETIREE RETURNS:

Returns on savings and investments are often benchmarked against inflation within an ecosystemIt thus infers that relationship between the value and performances of the funds in which you have contributed and inflation become the real value of your savings. If your pension funds administrators do not seem to either beat inflation on annual basis or lower the gap, a switch might be recommended.

Accordingly, the best of pension funds administration is not necessarily in colour, brand and age. Definitely not in popularity or what the specific organisation says about self but what verifiable figures say on consistent basis.

PENSION TRANSFERS WINDOW:

Consequent upon PenCom’s preparedness for the commencement of transfer windows for customers of pension funds administrators, most likely effective before the end of 2017, tracking of RSA and Retirees funds performances managed by individual pension administrators has become imperative if indeed, long term returns must be generated.

BEST PFAs- JANUARY – SEPTEMBER 2017:

A cursory analysis of performances in RSA and Retirees funds in about eighteen of the available PFAs revealed that age, brand and size has got nothing so much to do with performances. Perhaps gut and technical knowhow on the distribution of investment funds in their custody were responsible.

Retiree funds performance- Jan-Sept. 2017

Between January and September 2017, while a few PFAs took advantage of the brief opportunities that the nation’s stock market presented in the course of the year to improving the performances of their funds, many did not but chose to be passive and such earned nothing from the stock market.

Best Retiree funds performer: Jan-Sept. 2017:

MOST OUTSTANDING PFAs:

Of the lot, three pension funds administrators stood out within the first nine months of 2017. These are APT Pension Fund Managers Limited, Crusader Sterling Pensions Limited and Investment One Pension Managers Limited. These three administrators are among the best five in both RSA and Retiree funds, not just in the nine-month period but in the first and second quarters of the year. It might suffice to project these as the probable best in the year.

Other significant performers within the period under review include AIICO Pension Managers Limited and OAK Pensions Limited in Retiree funds. For RSA funds, First Guarantee Pension Limited and  ARM Pension Managers Limited did creditably well.

BEST PERFORMING PENSIONS FUNDS ADMINISTRATOR- JANUARY- SEPTEMBER 2017:

  1. APT PENSION MANAGERS LTD:

APT commenced operations in June 2007 and today operates with a paid up share capital of N1.38billion. 

INVESTMENT PORTFOLIO:

The strength of this establishment is not in the spread of operation but the distribution of investment funds.

It is apparent that Apt pensions has got the grasp of the capital market where 13.75% of its funds are invested. Fortunately enough, that is one area where others dread to trek for lack of the knowhow perhaps. The kind of returns the funds generate in both the RSA and Retiree accounts are clear indication of the managers’ dexterity in making use of the capital market to better the lots of its clients. The consistency in the rate of returns generated by Apt pensions managers are indicative of the fact that the organisation apparently selects the best and almost risk-less stocks hence, its ability to stand atop irrespective of stock market gyrations. Notably, the funds exposure to stocks is within the limit stipulated by regulation.

Apt pensions hold little cash, do little mutual funds as well as money market investments but strategically position self in treasury bills and federal government bonds. Talking about state government bonds? Apt pension Managers is wary.

BOARD:

The board and management of Apt pension managers is robust, comprising of men of varied experiences in financial management.

NINE MONTHS PERFORMANCE IN 2017:

With 17.01% return on the RSA funds under Apt Pensions within the first nine months of 2017, from 12.54% at half year and 12.05% at half year to 15.71% in nine months, contributors who patronise this organisation are sure positioned against inflation at year end all things being equal.

  1. CRUSADERSTERLING PENSION MANAGERS LTD:

The company commenced operations as Crusader pensions in 2004. Today as CrusaderSterling Pensions managers limited, it is not just one of the leading but also best sustainable profit generating managers to pension contributors in Nigeria. On the website of the company is written ‘Our Fund price as at 30th June 2016 was N3.0184 which was the highest in the industryThis translates to a cumulative return of 201%. We have consistently led the industry in the last 8 years in terms of Returns on Investment (ROI) on Retirement Savings Account. The implication is that we have made more money for contributors (customers) than all other Pension Fund Administrators (PFA).’ In other words, CrusaderSterling over the years does not pride in just the experience arising from age but credibility and returns.

OWNERSHIP:

The strength of the company largely is traceable in part to the owners which include Custodian and Allied Insurance (Nig.) Plc, Sterling Asset Management Ltd, Custodian Trustees Limited, WSTC Financial Services Limited, and Ideal Insurance Brokers Limited. Notably, Crusader is now a part of today’s Custodian and Allied Plc and of course the experienced management team.

INVESTMENT PORTFOLIO:

CrusaderSterling pension managers are stock market savvy with about 12.40% of its funds invested in the stock market where others are currently sceptical. This is within regulatory permission. Why not? Custodian Trustees, Sterling Asset Management and WSTC all as co-owners will readily be on hand to guide being core operators in the capital market. Besides, the Managing Director of the company also grew over the years within the capital market. The fact that the funds invested in the stock market had not eroded the values of the funds suggests credible and professional asset mix even in stocks.

CrusaderSterling is heavy in Federal government securities and seems to have totally shunned state government bonds.

NINE MONTHS PERFORMANCE IN 2017:

From 10.16% return to its clients in first half of 2017, CrusaderSterling pension managers grew to 15.55% in its Retiree funds and 10.25% at half year to 14.67% in another three months to September in its RSA funds.

Going forward, there is doubting the abilities of this funds generating returns above inflation in 2017.

  1. INVESTMENT ONE PENSIONS MANAGERS:

OWNERSHIP:

The company commenced operations as Royal Trust Pension Administrator Limited in 2007, became a subsidiary of Guaranty Trust Bank Plc in 2012 after the recapitalisation that brought in the then GTB Asset Management Ltd. As Investment One Pensions Managers, the company could be said to be just about five years old. Historically, Investment One is about ten years in operations.

NINE MONTHS PERFORMANCE IN 2017:

A cursory analysis of the company’s performances in both the RSA and Retiree funds revealed the level of competences of the Managers hence, the funds had out forth strong showing so far in 2017 as it grew its RSA funds to 7.69% at half year and 12.08% at the end of September. Its Retirees’ funds did not also slow down as this grew to 8.49% at half year and 13.42% at the end of September 2017.

If the growth rate so far recorded by Investment One Pension managers Ltd is maintained into the end of the year, the company would have in no small way consolidate its position as a lead performer in the industry.

INVESTMENT PORTFOLIO:

Investment One, just like other leading performers in the industry was in the period under review stock market savvy particularly in its RSA funds with about 13.70% of the funds invested in stocks as at September 30, 2017. It is equally relatively active in money market with about 11% of its RSA funds invested as at end of September 2017. Government securities take the lead with about 71% of its RSA funds. Investment One’s strategy for the Retiree funds was slightly more conservative as only 4.85% was invested in stocks whereas government securities took 84.08% as at September 30, 2017. Investment One’ 12.57% investments in money market in its retiree funds is slightly higher than the 11.06% of its RSA invested in same channel.

Significantly, it suffices to state that Investment one pension managers positions self for short term returns while strategising for the best of returns in the long term.

WATCH OUT FOR PART TWO NEXT WEEK…

 

BEST THREE PFAs WITH HIGHEST YIELDS (January – September 2017)

Retirement is a life time adventure. Of so much importance it is that living depends on it at old age. So is its planning which includes most prominently, savings and investment. Technically speaking however, every long term savings plan and investment must of necessity incorporate to a large extent, not just the security of the contributions but also the growth element. In other words, the need to note, access, review and adjust short term performances of your savings and investments geared toward secured retirement is as important as the long term expectations in itself. This is the more reasonable as much as necessitated by the notorious acts of major enemy of money called inflation. It behooves therefore, on every savers in any form of retirement scheme to keep tab on short term performances of such platforms and take decisions appropriately, as soon as possible.

Figures don’t have emotions more so when dished out by the individual institutions. Seeing that contributory pension plans take the lead in retirement savings, though it is highly regulated for security purpose, the need to tracking performances of major pension funds administrators even in the short term can’t be overemphasized more so as regulation demands that basic performances of both the retirement savings account (RSA) funds and the Retiree funds are made public.

CONTRIBUTORS’ ATTITUDES

Much as most pension funds administrators strive to comply with regulations, disappointedly, most pension contributors rarely follow up on performances of their funds.

In samples among pension contributors in Lagos, Ibadan, Akure and Abuja undertaken by Stockswatch, it could be deduced that most contributors are mostly nonchalant about the state of their savings as most contributors discard the monthly notes often sent to them by the administrators without even opening the envelope while those that seem to, do not have any form of comparative metrics to determining the performances of the current administrators and others in the industry irrespective of the availability of such.

BENCHMARKING RSA/RETIREE RETURNS:

Returns on savings and investments are often benchmarked against inflation within an ecosystemIt thus infers that relationship between the value and performances of the funds in which you have contributed and inflation become the real value of your savings. If your pension funds administrators do not seem to either beat inflation on annual basis or lower the gap, a switch might be recommended.

Accordingly, the best of pension funds administration is not necessarily in colour, brand and age. Definitely not in popularity or what the specific organisation says about self but what verifiable figures say on consistent basis.

PENSION TRANSFERS WINDOW:

Consequent upon PenCom’s preparedness for the commencement of transfer windows for customers of pension funds administrators, most likely effective before the end of 2017, tracking of RSA and Retirees funds performances managed by individual pension administrators has become imperative if indeed, long term returns must be generated.

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