The growing appetite for foreign currency investments, especially dollar-denominated assets, has propelled Nigeria’s mutual funds to a record N3.829 trillion, marking a 79.4% year-on-year growth by December 27, 2024. According to Securities and Exchange Commission (SEC) data, Dollar Funds led the market, contributing 44.6% of the total value, followed closely by Money Market Funds at 43.89%. The growth has been attributed to high fixed-income interest rates, stock market performance, and increased awareness of mutual funds’ benefits, making them an attractive option for retail and institutional investors alike.
Equity-based funds posted the highest yields year-to-date, with notable performances by Halo Asset Management (98.91%), SCM Capital Limited (63.74%), and Valu Alliance Balanced Funds (54.01%). The popularity of mutual funds lies in their professionally managed portfolios, offering diversified investments in stocks, bonds, and other securities. This trend reflects a broader shift in investment preferences as Nigerians seek higher returns amidst rising inflation and a bullish financial market environment.
Experts like Michael Oyebola and Victor Chiazor highlighted the role of increased financial literacy, attractive ROI, and the Central Bank of Nigeria’s monetary policies in driving this growth. With mutual funds becoming a vital investment platform for individuals across socioeconomic classes, the sector has transformed into a dynamic avenue for wealth creation in the Nigerian financial market.