Looking to invest with fsdh Investment?
Maybe you’ve come across one of their products that interests you, and you want to be sure about the company before investing your money?
In this article, we’ll take a look at the company behind fsdh and their investment products to see if they are worth your money or not.
It is then left to you to assume any risk of investment if you choose to invest with them.
Having said that, let’s dive in.
The Company Behind The Business
The company behind Fsdh Investment is FSDH Holding Company Limited, an asset management and financial advisory firm in Nigeria, based in Lagos State.
The company started off as the asset management department of FSDH Merchant Bank Limited in 1997 and in 2001, morphed into FSDH Asset Management Limited, a fully-fledged, stand-alone Company.
The company, which is registered with the Securities and Exchange Commission (SEC) as a Portfolio Manager and Corporate Investment Adviser, claims to have a team of experienced fund managers with a breadth of strong performing products across multiple asset classes.
The company believes that the strength of it’s teams and its market experience over the years makes it versatile in financial transactions and investment strategies that meet the needs of investors in an emerging economy like Nigeria.
Fsdh Investment Fund Management Strategy
The company operates like a traditional portfolio management company, and employs low-risk strategies to preserve and maximize returns for investors funds. They are positioned to serve both small and big clients across all economic classes.
Fsdh Investment Products
Fsdh Investment offers different investment portfolios with low-entry criteria. Here are some of the company’s investment products:
Coral Income Fund (CIF)
The Coral Income Fund is a portfolio targeted at investors who want monthly cash flow on their investment. It is a very liquid portfolio for short-term investors
The CIF is actively managed and open-ended, with an objective to enable investors to achieve stable and consistent income flows. It provides investors with monthly indicative yield on their investment.
Fsdh Investment invests the CIF exclusively into fixed income securities and money market instruments, which guarantees short-term returns for investors.
The minimum amount required to invest in the CIF is N5,000 and subsequent inflow of in like sum. Holding the CIF investment until maturity is not compulsory, so Investors wishing to reassign or redeem their investment can do so within 48 hours of investing.
Coral Balanced Fund (CBF)
The Coral Balance Fund is just like the Coral Income Fund, but with some slight difference.
With the CBF, investors have the opportunity to invest in a diversified portfolio across the equities and fixed income securities markets with as low as N5,000.
To guarantee investors’ returns, Fsdh through an independent custodian and in line with SEC requirements, invests a maximum of 65% of the CBF portfolio in choice equities listed on the Nigerian Stock Exchange.
The balance of the CBF portfolio is invested in fixed-income securities.
According to Fsdh Investment, investing in the CBF is considered lower risk than investing directly in equities.
Just like the CIF, Holding the CBF investment until maturity is not compulsory, so Investors wishing to reassign or redeem their investment can do so within 48 hours of investing.
Coral Money Market Fund (CMMF)
The CMMF is similar to the CBF, but with a slight difference.
Fsdh Investment claims that the CMMF outperforms the 91-day Treasury Bill rate, and pays a higher return than other of its portfolios.
To guarantee returns for investors, Fsdh invests 100% of the CMMF exclusively into fixed income securities and money market instruments known to have maturities less than 365 days.
Due to its liquidity and high returns, the CMMF could be used as a target savings portfolio towards funding short-term projects.
FSDH Dollar Fund
The FSDH Dollar Fund is an open-ended mutual fund which invests in US Dollar denominated fixed income securities, in line with section 160 of the Investment & Securities Act (ISA) of 2007.
Investors get the opportunity to invest in a diversified pool of Eurobonds and earn returns in USD. Returns are paid bi-annually, with the option for investors to reinvest back into their portfolio.
The minimum amount required to invest in the Dollar Fund is $1,000.
The Pros of Fsdh Investment
All of Fsdh Investment funds are very liquid in nature with no tenure obligation. Investors are free to redeem their investment anytime they wish at a prevailing bid price that is not dependent on market conditions.
To the average investor, any of Fsdh Investment funds could serve as an income-yielding investment savings account without the regular tenure rigidity.
When you buy or sell any of the Fsdh investment funds, there are no commissions involved. This means that investors could quickly invest, reinvest or divest, without going through the burden of paying fees at every transaction point.
Also, because there are no commissions required for any investment transaction, Fsdh Investment managers are able to provide unbiased advice for investors looking to grow their money.
Shared Transaction Costs
To minimize the transaction costs per unit of investment, Fsdh claims that its transaction costs are borne across the board by all subscribers of its funds, which reduces COT for the average investor and results in a higher yield.
The Cons of Fsdh Investment
No Clarity on Investment Yield
Fsdh does not make clear what the yield or interest on its Investment portfolio are. There is no such information on their website or brochure.
Probably, that information is confidential and can be given when you physically visit their office in Lagos or call them on the phone.
Like I said before, the company operates a traditional model, which is quite different from the digital investment companies that are springing up in Nigeria these days.
What this means is that the process of getting information about their products and services, and the investment process itself, might be slower than necessary.
You might have to wait for days to submit some paperwork to invest, reinvest, or divest your portfolio with Fsdh, which could be somewhat frustrating.
Cost of Transactions
I hate COTs, and I’m quite sure a lot of investors these days hate them as well. I guess we’ve been spoiled too much by these new digital investment companies.
I would have preferred Fsdh to remove it’s COTs and lower it’s yields on all portfolios, which would give investors more clarity and confidence to invest.
How Safe is Fsdh Investment?
With the company having been in operation for almost 25 years, it is really hard not to trust Fsdh Investment.
Also, their compliance with the Security Exchange Commission (SEC), and their participation on the Nigerian Stock Exchange, gives them a good industry reputation which should put investors’ minds at rest.
Should You Invest In Fsdh Funds?
If you ask me, I’d honestly say yes.
The upside to investing with Fsdh more than compensates for the downsides. But before investing with them, I’d get more clarity on their ROIs for each of their investment funds.
That would help me compare their portfolio yield with other investment options to help me make a more informed investment decision.
The goal should be to put your money in low-risk portfolios with the highest possible ROIs.