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

Interest rate and huge demand  have propelled investments in Mutual Funds to 82.2 % rise with its Net Asset Value, NAV, reaching N2.82 trillion Year-on-Year, YoY, in February 2024, from N1.55 trillion recorded in the corresponding period of 2023.

Mutual fund is a collective investment platform that pools funds from investors and managed professionally by investing in choice money and capital market assets.

Vanguard’s findings from the latest data released by the Securities and Exchange Commission, SEC, showed that Dollar /Fixed Income Funds recorded the highest NAV in absolute term at N1.354 trillion as against N315.8 billion recorded in the corresponding period of 2023. The Dollar Fixed Income Funds accounted for 48.06% of the total value of the NAV.

Under the Dollar/Fixed Income Funds, Stanbic IBTC Asset Management was the most active player among the 25 players in the market recording N803.5 billion and accounting for 59% of the total NAV.

It was followed by United Capita l Asset Management posting N243.2  billion NAV, representing 28.6 per cent of the sub sector’s fund, followed by FBNQUEST Asset Management recording N66.8 billion, representing 4.93% of the sub sector’s total value.

Further analysis showed that Money Market Funds occupied the second position in the Mutual Funds market segment posting a total N949.382billion NAV. This accounted for 33.69% of the total NAV of the entire market.

Leading the sub sector is Stanbic IBTC Asset Management  recording N428.6 billion NAV, which accounted for 45.14% of the sub sector’ s total value. Trailing behind is FBNQUEST Asset Management posting N209.5 billion NAV, which accounted for 22.06% of the sub sector’s value while Asset Resources followed recording N84.4 billion, indicating 8.89% of the sub sector’s total value.

The Bond/Fixed Funds occupied the third position on the sectoral analysis posting N315.837 billion and accounting for 20.41% of the total NAV.

Commenting on the rising value of the Mutual Funds, analysts and Chief Operating Officer, InvestData Limited, Ambrose Omordion, said: “Mutual Funds recorded huge return due to the nature of the fund and different investment windows it plays.  Dollar/Fixed Income Funds was the most active because of the appreciating value of Dollar followed by Money Market Funds because of the favourable interest rate and huge demand as against equities which has been unsteady in terms of return on investment.”