The total value of mutual fund investments increased by 33.1% year on year, YoY, to N1.87 trillion in the half year ending June 2023, H1’23, from N1.41 trillion at the same time in 2022, H1’22.
Vanguard reported that the high-interest rate on fixed-income securities, the stock market’s upswing, and growing public knowledge of the advantages of mutual funds are the main drivers of the increase.
Mutual funds are professionally managed investments made by asset management companies that pool money from a variety of low, medium, and high-income earners and invest it in venture capital or a portfolio of stocks, bonds, and other securities.
The Chief Executive Officer of MoneyCounsellors, Michael Oyebola, responded to the growth in mutual funds by saying, “The Nigerian mutual fund landscape has evolved significantly over the past few years, transforming into a vibrant and accessible investment platform for both retail and institutional investors.”
Mutual funds give investors the chance to engage in the financial markets without requiring a great deal of expertise by pooling money from different individuals and investing in a diverse portfolio of assets.
Numerous causes, including some degree of enhanced financial awareness among the population and the prolonged bull market, have contributed to the significant growth of the mutual fund business. Investors have been encouraged to seek higher returns through mutual fund investments.
The primary justification for every investment made by businesses or individuals is the return on investment, according to the Head of Research and Investment at FSL Securities Limited, Victor Chiazor.
Therefore, due to the high yield and rising inflation when compared to other assets in the financial markets, large investors are shifting to mutual funds.
