Investments in fixed income securities by Pension Fund Administrators saw a notable increase, rising by 17.7% Year-on-Year over the eight months ending in August 2025.

This surge pushed the total investment value to N2.405 trillion from the N2.043 trillion recorded during the corresponding period in 2024.

This significant growth was disclosed in the latest pension funds industry portfolio report released by the National Pension Commission, which details the sector’s activities up to August 31, 2025.

The category of fixed income or money market securities includes instruments such as fixed deposits, bank acceptances, commercial papers, and foreign money market instruments.

Market operators attribute this substantial rise in money market securities investments primarily to the high Monetary Policy Rate regime implemented by the Central Bank of Nigeria over the past two years.

The MPR serves as the benchmark interest rate for both government and corporate securities across the country. The upswing is further boosted by the relatively low-risk factor associated with these money market securities.

In response to the persistent inflationary trend in the economy, the CBN had initially maintained a high MPR, raising it to 27.5% before a recent marginal reduction last month to 27%. According to the market operators, this slight reduction was intentionally implemented to strike a balance between supporting economic growth and maintaining inflation control, following a period characterized by sustained disinflation.

Vanguard’s reported that these money market securities constitute 9.28% of the total pension fund assets, which are currently valued at N25.895 trillion.

During the review period, fixed income securities were the dominant sub-category, accounting for a massive 77.8% of the total money market securities value of N2.405 trillion.

Commercial papers followed, recording N226 billion, which represented 9.4% of the total value of money market securities. Occupying the third position were foreign money market instruments, with an investment of N102 billion, which accounts for 4.2% of the total value of money market securities.

Reacting to the development in the pension sector, David Adonri, an Analyst and Vice Chairman, provided clarity on the investment drivers, stating: “The Investment in Money Market Securities by the Pension Funds Administrators, PFAs is necessary because of the attractive interest rate and also, the less risky nature of the securities”.

He also stressed a critical need for strategizing future investments, adding that “the PFAs need to diversify their investment portfolio in order to make higher return for the investors”.