Zenith Bank Mutual Funds

[Apache]

Originally Posted by tonidol

I quite understand the difference between the ethical, income and equity fund but what is the house rooting for?

Is it a good idea to spread the it across three or just stick to one that is most profitable.

Guys who have been involved with these type of investment (ARM, Nigfund or IBTC) should analyse and advise pls

Like I had mentioned earlier, Not much analysis can be done until you see the prospectus. We can then compare the ROI on the three funds to decide which is most profitable.
Personally, I don't see what the new Zenith Mutual funds can offer that the already existing ones won't. So don't know what the excitement is all about. The concept of mutual funds are all the same, what distinguishes them is the pedigree of the fund manager. as such, I am always averse to new comers to the field. Will rather stick to the established/ experienced players.
As for analysis on mutual funds, if you read through the threads on mutual funds, I think enough analysis and advice have been made on those threads

[zainabusman]

Originally Posted by elegbe12416

Does anyone have access to copies of the application forms for the Zenith
's Mutual funds that are to be launched ?
Thanks guys.

check Welcome! to Zenith Bank for the prospectus.

Change Agent

[Apache]

Originally Posted by zainabusman

check Welcome! to Zenith Bank for the prospectus.

Change Agent

Omo! I don't if it's my server but I am finding it difficult downloading the materials for this Zenith funds.
@Zainabusman, any luck? Please if you have it, can you upload the pdf file on the thread.
Thanks

[hispy99]

Originally Posted by Apache

Omo! I don't if it's my server but I am finding it difficult downloading the materials for this Zenith funds.
@Zainabusman, any luck? Please if you have it, can you upload the pdf file on the thread.
Thanks

Can't download it either

[zainabusman]

Originally Posted by Apache

Omo! I don't if it's my server but I am finding it difficult downloading the materials for this Zenith funds.
@Zainabusman, any luck? Please if you have it, can you upload the pdf file on the thread.
Thanks

I cant also download it from my office even though our internet speed is quite good. Probably a technical hitch that will have to be rectified by Zenith.

[Goom]

Zenith Funds

[Apache]

Originally Posted by Goom

Zenith Funds

Can't download this either

[Saintbeng]

Here is a summary of the funds.
Would try and upload the full prospectus later.

[zainabusman]

Originally Posted by Apache

Can't download this either

I cant download either so i got a hard copy of the ethical fund prospectus.

I dont think i will go for it. I did a quick comparison with the IBTC ethical fund. While the 5% which will cover both management fee and expenses that will be charged by the fund is comparable to the 2% managment fee and roughly 2.4% expenses charged by IBTC ethical, the incentive is not.

Zenith wants to keep 30% of any gains in excess of 10% as incentive. Imagine. If the fund doubles, Zenith will take out 27% (30% of 90%) as incentive. In my view this is way too much. The incentive charged by IBTC ethical is quite minimal. Although they did not specify a percentage, if one calculates it from the accounts, it is only 1% of the increase in Net Asset Value of the Fund. This is obviously reasonable.

For this reason, i will not subscribe to the fund. Imagine, u have to relinquish 30% of the gains in excess of 10%.

[Monwowo]

@ Zainabusman

This is a good analysis. I think we need more of this type of analysis from whoever has been able to read the full prospectus given the difficulty downloading the document. Thanks again

[hispy99]

Originally Posted by zainabusman

I cant download either so i got a hard copy of the ethical fund prospectus.

I dont think i will go for it. I did a quick comparison with the IBTC ethical fund. While the 5% which will cover both management fee and expenses that will be charged by the fund is comparable to the 2% managment fee and roughly 2.4% expenses charged by IBTC ethical, the incentive is not.

Zenith wants to keep 30% of any gains in excess of 10% as incentive. Imagine. If the fund doubles, Zenith will take out 27% (30% of 90%) as incentive. In my view this is way too much. The incentive charged by IBTC ethical is quite minimal. Although they did not specify a percentage, if one calculates it from the accounts, it is only 1% of the increase in Net Asset Value of the Fund. This is obviously reasonable.

For this reason, i will not subscribe to the fund. Imagine, u have to relinquish 30% of the gains in excess of 10%.

These mutual funds are beginning to sound like hedge funds The SEC or whoever is responsible for regulating these investments need to do something about mutual funds with such incentive fees. I invest in mutual funds in the U.S and no where have I come across one that charges an "incentive fee" for gains above a certain limit.

I have not looked at the fee structure, but I hope that it is not designed in such a way as to charge you the fee even if they have not exceeded prior performance. For example if the fund doubles from N100 to N200 in year one, loses 50% in year two i.e goes from N200 back to N100 and then doubles again in year 3 i.e. goes from N100 to N200. Will they charge you this incentive fee in both Year one and Year three? If they do, then they are thieves, because as an investor, you have only gained 100% from year one to year three, meanwhile they would have charged you the incentive fee twice, so it's more like they charged you 60% of any gaines above 10% instead of 30%.

[zainabusman]

Originally Posted by hispy99

These mutual funds are beginning to sound like hedge funds The SEC or whoever is responsible for regulating these investments need to do something about mutual funds with such incentive fees. I invest in mutual funds in the U.S and no where have I come across one that charges an "incentive fee" for gains above a certain limit.

I have not looked at the fee structure, but I hope that it is not designed in such a way as to charge you the fee even if they have not exceeded prior performance. For example if the fund doubles from N100 to N200 in year one, loses 50% in year two i.e goes from N200 back to N100 and then doubles again in year 3 i.e. goes from N100 to N200. Will they charge you this incentive fee in both Year one and Year two. If they do, then they are thieves, because as an investor, you have only gained 100% from year one to year three, meanwhile they would have charged you the incentive fee twice, so it's more like they charged you 60% of any gaines above 10% instead of 30%.

I take it to mean u mean year three? Off course they will! If they move from 100 to 200 they charge 27% (30% of 90%). If they make a loss in year two, then there will be no incentive fee. However, they get to deduct the management fee which is about 2% of NAV even if they make a loss. If they move form 100 to 200 in year three, they will charge another 27%. So they would have charged u 54% from a gain of 100% in 3 years.

I think Zenith is banking on the fact that most investors dont read bw the lines. The only winner in this is Zenith.

When it comes to mutual funds or even choosing a pension fund administrator, the fee structure is very important.

[hispy99]

Originally Posted by zainabusman

I take it to mean u mean year three? Off course they will! If they move from 100 to 200 they charge 27% (30% of 90%). If they make a loss in year two, then there will be no incentive fee. However, they get to deduct the management fee which is about 2% of NAV even if they make a loss. If they move form 100 to 200 in year three, they will charge another 27%. So they would have charged u 54% from a gain of 100% in 3 years.

I think Zenith is banking on the fact that most investors dont read bw the lines. The only winner in this is Zenith.

When it comes to mutual funds or even choosing a pension fund administrator, the fee structure is very important.

Sorry, I meant year 3...will make the change in my original post.

Even hedge funds in the U.S that charge a similar fee structure don't get to collect an incentive fee ever again till they post gains above N200.

[Apache]

Now this is news to me.
I am currently invested in the IBTC Ethical fund, ARM Discovery fund and ARM Aggressive growth fund and I don't remember hearing of this incentive of a thing. I know about the management fees etc but the way I have always gone about is that I buy at the bid price and when I want to sell, it is sold at the offer price (abi is it the other way round - at least you get what I am trying to say). I have cashed out with ARM Discovery fund at a gain of over 100% and they didn't take any incentive. The money was just calcualted at that day's offer price and was paid into my account.
Is this incentive thing new? are there other mutual funds practising this? I have not seen nor read the prospectus so I am speaking in the dark but I have the prospectuses for all the funds I had mentioned above earlier

[hispy99]

Originally Posted by Apache

Now this is news to me.
I am currently invested in the IBTC Ethical fund, ARM Discovery fund and ARM Aggressive growth fund and I don't remember hearing of this incentive of a thing. I know about the management fees etc but the way I have always gone about is that I buy at the bid price and when I want to sell, it is sold at the offer price (abi is it the other way round - at least you get what I am trying to say). I have cashed out with ARM Discovery fund at a gain of over 100% and they didn't take any incentive. The money was just calcualted at that day's offer price and was paid into my account.
Is this incentive thing new? are there other mutual funds practising this? I have not seen nor read the prospectus so I am speaking in the dark but I have the prospectuses for all the funds I had mentioned above earlier

Don't know if the funds you mentioned charge the incentive fee, but if they do, they would have deducted the fee before arriving at the bid/offer price.