By Peter Egwuatu
Net Asset Value, Year-on-Year, YoY, of investments in Mutual Funds has jumped by 190.3% to N4.6trillion as at mid-March 2025 from N1.6trillion the same period 2023.
The sustained surge in the investments is attributable to the high interest environment created by the Central Bank of Nigeria, CBN, under its contractionary monetary policy regime which has seen the Monetary Policy Rate, MPR, at all time high of 27.50%, with an average lending rate for one year at 21.3%.
Breakdown of data released by the Securities and Exchange Commission, SEC, shows that the Money Market Funds were the most patronized recording N2.332 trillion and contributed 50.93 % of the total NAV of the Mutual Funds. Stanbic IBTC Money Market Funds recorded N1.04 trillion, thus accounting for 44.57% of the Money Market Funds. It was followed by FBNQUEST Asset Management Fund posting N420.179 billion and accounting for 18.01% of the market’s fund, while Cardinalstone Asset Management occupied the third position on the chart posing N4.842 billion and accounted for 12.84% of the Money Market Funds.
Further analysis of the Mutual Funds showed that trailing the Money Market Funds was Fixed Income Fund, which posted N1.822 trillion and accounted for 39.55% of the total Funds.
The Bond/Fixed Income Funds occupied the third position recording N195.446 billion, representing 4.24% of the total NAV of the Mutual Funds.
Reacting to this development, David Adonri , Analyst and Executive Vice Chairman at Hihgcap Securities said : “ The Mutual Funds have been very attractive to investors given the high interest rate regime by the CBN. The CBN have maintained high MRR for over a year. The growth trend highlights a strategic shift by Nigerian investors seeking to hedge against rising inflation and exchange rate volatility”.
Commenting also, a chartered stockbroker, Tajudeen Olayinka, said : “ The inflow into Mutual Funds is particularly noteworthy as investors look for high-yielding low-risk opportunities, gravitating towards fixed-income, Money Market Funds, Bonds and dollar-denominated instruments.
‘The growing preference for Mutual Funds amid market volatility underscores a broader strategy among Nigerian investors to seek stability and higher returns in a challenging economic environment. Money Market Funds invest exclusively in short-term debt securities like treasury bills, bank placements and commercial papers. These funds provide investors with a low-risk option for short-term cash management and capital preservation. Money market funds seek to maintain a stable NAV) and are less risky than other investment types—like stocks or bonds”.
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