Why NGX Pension Broad Index Outperforms Funds Managed by All PFAs in Nigeria?

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The Nigerian Exchange Limited (NGX), in collaboration with the National Pension Commission (PenCom) and the Pension Fund Operators Association of Nigeria (PenOp), organized a webinar focusing on the NGX Pension Broad Index. The webinar aimed to underscore the significance of this benchmark for the pension fund industry in Nigeria.

 

Jude Chiemeka, the acting Chief Executive Officer of NGX, delivered the opening speech at the webinar, highlighting NGX’s longstanding commitment to providing benchmarks for the Nigerian capital market. He emphasized NGX’s proactive role in deepening the market by offering over 20 benchmarks, including the NGX Pension Broad Index, which has seen year-to-date gains of 32 percent.

 

Abimbola Babalola, Chairman of the NGX Index Governance Committee, elaborated on the importance of the benchmark for pension fund administrators (PFAs), stating that it provides them with a reference point to measure their performance and diversify their investment choices. Babalola emphasized that the index serves as a guide for investors, enabling them to make informed decisions based on the constituents of the NGX broad benchmark.

 

Kazeem Alimi, Head of NGX Secondary Market, highlighted the comprehensive nature of the index, incorporating mid-cap and large-cap stocks to ensure robust performance measurement. He underscored the importance of the benchmark in overcoming potential challenges.

Ehis Uzenebor, Chief Investment Officer of Shell CPFA, emphasized the significance of benchmarking in evaluating fund managers’ performance objectively. He stressed the role of benchmarking in enhancing risk management and providing a basis for comparison across the industry.

 

Abdulqadir Dahiru, Head of Investment Supervision Department at PenCom, commended the collaboration with NGX, which led to the development of the NGX Broad Pension Index. He highlighted the index’s role in providing diversification and empowering PFAs to measure their performance effectively. Dahiru emphasized the importance of capacity building to enhance PFAs’ understanding and proficiency in navigating the market.

 

Pension Nigeria commented on the performance of the NGX Pension Broad Index, noting its significant outperformance compared to funds managed by all PFAs in Nigeria. Despite regulatory limitations on investment allocation, the index demonstrated a return on investment of 34.53% from January 1st, 2024, to February 29th, 2024, showcasing its robust performance and potential for driving value for pension fund stakeholders.


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