Mutual Funds Grow To N7.67trn On Higher Demand, Yields

Nigeria’s mutual fund industry recorded a strong growth trajectory, with total assets under management (AUM) reaching N7.672 trillion in 2025, driven by higher demand and attractive yields.

The growth is attributed to increased investor confidence, improved market performance, and the introduction of innovative products.

This represents a remarkable 100.16 per cent increase over 2024 performance, rising from N3.833 trillion at the end of December 2024 to N7.672 trillion as at December 24, 2025.

The growth trend highlights a strategic shift by Nigerian investors seeking to hedge against rising inflation and exchange rate volatility. The inflow into mutual funds is particularly noteworthy as investors look for high-yielding low-risk opportunities, gravitating towards fixed-income and dollar-denominated instruments.

A mutual fund is a collective investment scheme that pools money from multiple investors to invest in a diversified portfolio, such as stocks, bonds, or other securities, managed by a professional fund manager.

Review of the Funds showed that Equity-based Funds recorded full-year growth of N46.436 billion to N79.642 billion from N33.206 billion in December 2024. Money market funds, which invest mainly in money market instruments such as treasury bills rose by N3.046 trillion to N4.745 trillion from N1.699 trillion, while Bonds and Fixed Income Funds primarily focus on debt securities up by N50.689 billion to N237.259 billion in 2025 from N186.57 billion at which it opened for the year.

Dollar Funds comprise Eurobonds and Fixed Income, which rose by N254 billion to N1.956 trillion on December 24, 2025, from N1.702 trillion at which it opened for 2025, while Real Estate Investment Trusts rose by N383.289 billion to N483.055 billion from N99.766 billion.

Balanced Funds increased by N29.057 billion to N83.514 billion in 2025, while Ethical Funds increased by N2.222 billion to N8.129 billion and Shari’ah Compliant Funds rose by N27.634 billion to N80.120 billion in 2025 from N52.486 billion at which it opened for the year.

Speaking about the performance of CIS, the director-general of the Securities and Exchange Commission (SEC), Dr Emomotimi Agama, disclosed that the collective investment schemes’ performance had been on an increase, saying the schemes are a part of the market system that allows people to diversify their risk via different angles besides going straight to the companies to invest.

He said, “In the CIS, you get a bucket of shares and ask people to invest. Therefore, if you are investing through a collective investment scheme, you probably will be investing in 10 companies via one route as different from going to invest directly in any company.

“It reduces your risk, it diversifies your potential and of course takes care of the ups and downs in the market whenever they exist and it is for us a very good area for Nigerians to invest in because when you do not understand it, do not go into it. With a collective investment scheme, you do not need to understand it because someone is there to understand it for you and invest on your behalf, understanding the vagaries of the market, its dynamics and how it runs.”

The managing director of HighCap Securities Limited,  David Adonri said that mutual fund investment had been widely embraced as a good investment platform in the developed economies, and serves as a vehicle for the mobilisation of capital for economic development.

He noted the investors are now embracing mutual fund instruments to diversify their investment risks especially in the equities market, saying that since investments in mutual funds are like investments in a basket of securities.

Also, the chief operating officer of InvestData Consulting Limited, Ambrose Omordion said “investment in mutual funds has over the years continued to increase especially as more investors become aware of the options this asset class provides. Going by the fact that mutual funds invest in various asset classes and are managed by professionals, investors are becoming more comfortable with the idea of investing their funds in any mutual fund that meets their investment needs, be it an equity fund, fixed income fund or a balanced fund. The increase in net assets is a result of the options which have become available to investors.”