March 25, 2020

FBNQuest Advices Investors on Contrarian Investing

FBNQuest Asset Management has encouraged investors to consider contrarian investing by taking advantage of the FBN Nigeria Eurobond (USD) Fund. Contrarian investing is an investment strategy that involves purchasing and selling in contrast to prevailing sentiments of the time. This means an investor is buying assets when other market participants are selling.

Having a contrarian view does not necessarily mean having a negative view of the overall stock market, or believing it is overvalued. A contrarian simply seeks opportunities to buy or sell specific investments when the majority of investors appear to be doing the opposite.

Looking back, market sells-offs or dips have been caused by the great depression, the technology boom and the 2008 financial crisis to mention a few. We cannot deny the effects of COVID-19 to the world’s economy, as we see major markets trading at steep discounts and Central Banks/Governments responding through rate cuts and cash injections into their economies. This situation presents an opportunity for investors to invest and diversify their portfolios. The latter is more important given the shock in crude oil prices, which has experienced a massive drop to the range of $26-$28 per barrel over the past month.

The FBN Nigeria Eurobond has served as a veritable source of diversification of portfolios for investors, offering good value for investments made. Considering the need for investors to diversify their income stream and asset classes, the FBN Nigeria Eurobond (USD) Fund provides a viable option for contrarian investing and wealth creation.

Commenting on the Fund, Ike Onyia, Managing Director of FBNQuest Asset Management stated: “At this time, the FBN Nigeria Eurobond (USD) Fund provides an opportunity for Nigerian investors to diversify their asset classes on their wealth-creation journey. This is especially as it remains accessible to all categories of investors, offering a low minimum investment requirement currently at USD 2,500.”

He further added that the Fund was Nigeria’s first dollar-denominated public fund, and it invests in a broad range of US Dollar-denominated debt securities issued by the Federal Government of Nigeria (FGN), and highly rated Corporate and Financial Institutions. It is regulated by the Securities and Exchange Commission (SEC). The Fund also provides flexibility and liquidity for expenses such as holidays, mortgages and university fees in foreign currency; and has a proven performance track record having delivered average returns of 34.4% from inception in January 2016 to February 2020.

The FBN Nigeria Eurobond (USD) Fund was the recipient of the Bond Fund of the year at the BusinessDay Banks & Other Financial Institution Awards (BAFI) awards, which took place in November 2019.

FBNQuest Asset Management

FBNQuest Asset Management is a leading asset manager in Nigeria for individual and institutional investors. We offer a range of investment products and services, with strategies spanning various asset classes and sectors. We guide our clients through Africa’s dynamic markets, and identify the best opportunities that shape their portfolios.

Our specialist portfolio and fund management services cover management of investment accounts for high-net-worth individuals and institutional clients; including insurance companies, pension funds, public and private mutual funds, endowment and charity funds, as well as segregated and special accounts.