Melvin Onwubuke
Mutual Fund is one of the few asset classes that were able to perform overtime amidst inflation and economic uncertainty in Nigeria. In January 2024, the total net asset value of Mutual Fund investments increased by 76.9 per cent to N2.3 trillion from N1.32 trillion in the corresponding period for 2023 year on year.
The increase is attributed to high interest rates on fixed-income instruments and the rising stock market, as well as increased awareness about mutual funds benefits, according to Vanguard.
According to data compiled by the Securities and Exchange Commission, Money Market Fund led other Funds recording N949.7 billion which accounted for 41.69% of the total Fund’s value.
Followed by Dollar Funds posting N804.11 billion and accounting for 35.3% of the total value of the Mutual Funds.
Bond/Fixed Income Fund occupied the third position recording N287.14billion and representing 12.6% of the total value of the Funds.
Mutual funds are investment vehicles professionally managed by asset management firms, that pool funds from individuals and invest in venture capital, portfolios of stocks, bonds, and other securities.
Commenting on this development, the Chief Executive Officer at MoneyCounsellors, Michael Oyebola said “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 pool money from various investors and invest in a diversified portfolio of securities, providing investors with an opportunity to participate in the financial markets without needing extensive knowledge or experience. The substantial growth in the mutual fund industry can be attributed to various factors; including some level of increased financial literacy among the population as well as the ongoing bull market has also encouraged investors to seek higher returns through mutual fund investments.”
Meanwhile, in his remark on the rising profile of Mutual Funds, Analyst and Vice Executive Chairman, of HighCap Securities Limited, David Adonri, said “The growth in NAV of Mutual Funds is impressive as some of the funds even outperformed the equities. This also indicates that the funds were managed conservatively. They may have been weighted more towards debt.
“The high interest and the recent monetary reforms by the present administration have also contributed immensely to attract investors into the Mutual Funds market.”
