Nigerians’ appetite for secured investment has pushed the Net Asset Value (NAV) of Mutual Funds to N3.781 trillion in the first week of this month, up 89.5 % from N1.995 trillion in the corresponding period 2023.
Analysts partly attributed the surge in the Funds to the impact of steady mark up in monetary policy rate, naira devaluation among other factors.
Data released by the Securities and Exchange Commission, SEC, showed that the Fixed Income Funds contributed significantly to boost the Funds as it accounted for 47.76% of the total NAV. It was followed by Money Market Funds recording N1.524 trillion in the period under review and accounted for 40.31% of the total NAV. The Bond\Fixed Income Funds occupied the third position recording N212.5 billion and accounted for 5.62% of the total NAV.
Reacting to this development, Analyst \Head of Research and Investment at Fidelity Scurities Limited, Victor Chiazor said: “The growth trend highlights a strategic shift by Nigerian investors seeking to hedge against rising inflation and exchange rate volatility.
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. For instance, the avearge yeild on Fixed Income Funds Year to Date, YtD is 7.72%.
Commenting as well, Chief Operating Officer at InvestData Consulting, Ambrose Omordion, said : “ 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”.