Investors Flock to Mutual Funds: Portfolio Values Surge by 41.2% to N2.1 Trillion

Recent reports reveal a significant surge in the mutual fund landscape as investors increasingly shift their funds to this asset class.

Data from the Securities and Exchange Commission (SEC) indicates that the total value of investments in mutual funds rose by 41.2% to N2.1 trillion in the ten months ended October 20, 2023, up from N1.5 trillion in the corresponding period of 2022.

Money Market Funds (MMFs) spearheaded this growth, contributing N885.7 billion and constituting 43.39% of the total mutual fund value.

Income Funds followed closely, posting N631.778 billion and representing 31.55% of the total value.

Bond/Fixed Income Funds secured the third position, recording N297.314 billion, accounting for 14.85% of the total value of mutual funds.

The allure of high yields on Money Market Funds, fixed income funds, and bond funds, coupled with the upward performance of the stock market, has driven this substantial growth.

Michael Oyebola, CEO of MoneyCounsellors, notes that the Nigerian mutual fund landscape has become a vibrant and accessible investment platform, attracting both retail and institutional investors.

Victor Chiazor, Head of Research and Investment at FSL Securities Limited, explains that as yields on investments drop, investors seek higher returns and rebalance their portfolios.

Analyst David Adonri attributes the rising profile of mutual funds to impressive yields in Net Asset Value (NAV), along with a 35.09% return for the equities market in the last ten months and recent monetary reforms.

This trend underscores the evolving and dynamic nature of Nigeria’s mutual fund industry, reflecting increased financial literacy and a growing appetite for diversified investment options.