The Nigerian mutual funds market is experiencing an unprecedented boom, with total assets surging by a staggering 190.3% year-on-year, reaching ₦4.6 trillion as of mid-March 2025. This massive growth, up from ₦1.6 trillion in 2023, is largely fueled by high interest rates and a strategic shift in investor behavior.
What’s Driving the Surge?
The Central Bank of Nigeria’s (CBN) aggressive monetary tightening policy, which has pushed the Monetary Policy Rate (MPR) to a record 27.50%, has made fixed-income investments more attractive than ever. The average one-year lending rate now stands at 21.3%, encouraging investors to seek safer, high-yield options like mutual funds.
Breakdown of the Boom
According to data from the Securities and Exchange Commission (SEC), Money Market Funds remain the most sought-after, accounting for ₦2.332 trillion, or 50.93% of total mutual fund assets.
- Stanbic IBTC Money Market Fund leads the pack with ₦1.04 trillion, capturing a dominant 44.57% share.
- FBNQUEST Asset Management Fund follows with ₦420.179 billion (18.01%).
- Cardinalstone Asset Management Fund holds ₦4.842 billion (12.84%).
Trailing closely behind Money Market Funds are Fixed Income Funds, which have attracted ₦1.822 trillion (39.55% of total assets), while Bond/Fixed Income Funds hold ₦195.446 billion (4.24%).
What Experts Are Saying
Financial analysts say the surge is no coincidence.
David Adonri, Executive Vice Chairman at Highcap Securities, explains:
“Mutual funds have become highly attractive due to the CBN’s sustained high interest rate environment. Investors are strategically shifting their assets to hedge against rising inflation and exchange rate volatility.”
Similarly, stockbroker Tajudeen Olayinka highlights:
“With economic uncertainty and market volatility, investors are seeking high-yield, low-risk opportunities. This has driven a significant inflow into money market funds, bonds, and dollar-denominated instruments.”
Why It Matters
This trend underscores a broader shift in investment strategies among Nigerians. As inflation and currency fluctuations continue to challenge the economy, mutual funds are proving to be a preferred option for wealth preservation and steady returns.
With interest rates still on the rise, will this mutual funds boom continue? Investors and financial experts will be watching closely.
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