The value of Nigeria’s pension funds climbed by 2.23 percent month on month to N20.23 trillion in May 2024.
According to the National Pension Commission’s unaudited report on the pension funds industry portfolio for the period ended May 31, 2024, Pension Funds Administrators’ investment in FG securities remained high and increased during the review period, accounting for 63.22 percent of the total funds.
Investment in government securities stood at N12.79tn from N12.40tn in April.
PFAs also invested approximately 10.83 percent of their funds in corporate debt products, with corporate bonds receiving the greatest share.
Experts link the PFAs’ interest in government securities and money market instruments to the Central Bank of Nigeria’s hawkish approach, which has seen it boost benchmark interest rates in an effort to limit market liquidity.
Investors, especially pension funds, have allocated more capital to fixed-income assets in search of higher returns for their funds and contributors due to the attractive interest rates available.
In the high-interest environment of the money market, pension fund investment fell slightly to N1.93 trillion from N1.95 trillion the previous month.
In May, appetite for mutual funds increased compared to April, when that portion of the market declined.
In April, mutual funds dipped by 19.93 per cent month-on-month to N85.19bn from N106.39bn in March.
However, in May, investment in mutual funds witnessed an upsurge to N95.28bn.
Pension funds rose by N1.87 trillion in the first five months of the year, and by N4.12 trillion year on year.
Between May 2023 and May of this year, membership in the Retired Savings Account climbed by 356,795 (3.57%) to 10,351,624.
