Nigerian investors have significantly increased their interest in Mutual Funds, with the total Net Asset Value (NAV) soaring by 80.3% to N3.75 trillion as of December 13, 2024, compared to N2.08 trillion in 2023. Data from the Securities and Exchange Commission (SEC) shows Fixed Income Funds leading the pack with N1.693 trillion, accounting for 45.13% of the total NAV, followed closely by Money Market Funds at N1.617 trillion (43.1%) and Bond/Fixed Income Funds at N199.22 billion (5.31%). Notably, Money Market Funds recorded the highest year-to-date (YtD) yield at 21.32%, offering attractive returns amidst economic uncertainty.
Analysts attribute this growth to investors’ strategic moves to hedge against rising inflation and exchange rate volatility. The surge in Mutual Funds signifies a shift toward low-risk, high-yield investment opportunities, particularly Money Market and Fixed Income Funds. Tajudeen Olayinka, an investment banker, emphasized the preference for stability and higher returns, noting that Money Market Funds, which focus on short-term debt securities like treasury bills and bank placements, are becoming the go-to option for capital preservation.
In contrast, investment in Nigerian start-ups has plummeted by 78.2%, dropping to $57.55 million in 2024. This decline underscores a challenging environment for venture capital, as investors prioritize more secure and liquid assets in response to economic pressures. The overall trend highlights the evolving priorities of Nigerian investors as they navigate a volatile market landscape.