THE Managing Director of Futureview Asset Management, Ughochi Nnodi, has given investment tips on how to develop a portfolio that can deliver competitive returns despite the current inflationary environment.
Following eight months of gradual decrease in headline inflation, the rate in December 2021 increased somewhat from 15.4 percent in November to 15.63 percent in December. The rise in headline inflation, which was blamed on currency devaluation and liquidity issues in the forex market, was projected to have a detrimental impact on all investment outlets.
According to Nnodi, Investors should take advantage of the difficult operating climate by investing in inflation-hedging assets.
She revealed that there are resilient industries that outperform inflation and provide alpha returns explaining that commodities, financials, healthcare, consumer staples, energy, technology, and real estate should all be included in a well-balanced portfolio.
“There are resilient stocks that thrive during inflation because of their underlying assets. Investors should build their portfolios with stocks of companies in the healthcare, energy, commodities, consumer staples, financials and real estate among others as a risk and reward trade off,’’ she added.
Mutual funds, which are a collection of investments in many asset types, should not be overlooked.
“At Futureview, we design financial products to meet the demand of our array of customers with diverse investment objectives and risk tolerance. For instance, we have a product that targets Nigerians in diaspora. It is called Futureview Dollar Fund. We floated it along with Futureview Equity Fund. The two financial instruments hedge investment against inflation while they provide regular income.
“It is settled in portfolio management that during high inflation rate, mutual funds provide an opportunities for diversification at every dollar level, sharing of investment expenses, economies of scale and operational efficiencies, ease of investing in specialized market sectors and investment tracking, simple portfolio management, access to professional money managers and low trading costs,” Nnodi.
