Interest rate, demand drive up investments in Mutual Funds to N2.8trn

The investment in Mutual Funds has experienced a significant surge of 82.2% rise in Net Asset Value (NAV), reaching N2.82 trillion Year-on-Year (YoY) in February 2024, up from N1.55 trillion recorded in the corresponding period of 2023. This growth can be attributed to the combination of favorable interest rates and high demand.

Mutual funds operate as collective investment platforms, pooling funds from various investors and professionally managing them by investing in selected money and capital market assets. According to findings from the Securities and Exchange Commission (SEC), Dollar/Fixed Income Funds emerged as the dominant category, with the highest NAV in absolute terms at N1.354 trillion, accounting for 48.06% of the total NAV.

Stanbic IBTC Asset Management emerged as the most active player in this category, recording N803.5 billion NAV, which represented 59% of the total NAV within the Dollar/Fixed Income Funds segment. This was followed by United Capital Asset Management and FBNQUEST Asset Management.

Money Market Funds occupied the second position in terms of NAV, totaling N949.382 billion, which accounted for 33.69% of the total NAV of the entire market. Stanbic IBTC Asset Management also led in this category, followed by FBNQUEST Asset Management and Asset Resources.

Bond/Fixed Funds held the third position in the sectoral analysis, posting N315.837 billion NAV, accounting for 20.41% of the total NAV.

Ambrose Omordion, an analyst and Chief Operating Officer at InvestData Limited, commented on the rising value of Mutual Funds, attributing it to the fund’s nature and its diverse investment opportunities. He noted that Dollar/Fixed Income Funds were particularly active due to the appreciating value of the dollar, while Money Market Funds. benefited from favorable interest rates and high demand, contrasting with equities, which have shown instability in terms of return on investment