- Fund Growth Outpaces Yield Momentum in Nigeria’s Money-Market Market
Nigeria’s money-market funds continued to attract investors in October, with assets rising to N6.90 trillion, even as yields at the top of the performance table softened for most leading funds.
The sector’s net asset value increased 5.05% from N6.56 trillion in September, while the number of investors rose to 959,866 an increase of 49,740, or 5.47%, in a month. The gains suggest that demand for liquid, relatively conservative investments remains strong, even as returns begin to moderate.
First Ally Money Market Fund retained the top position with a year-to-date yield of 21.17%. DLM Money Market Fund followed at 20.47%, with Coronation Money Market Fund third at 20.31%. At the bottom of the top 10, STL Money Market Fund recorded 18.93%.
The ranking, based on Securities and Exchange Commission data, captures two trends moving in different directions. More capital and investors are entering the category, while the leading funds’ reported returns are beginning to ease.
Six of the seven funds that remained in the top 10 from September recorded lower year-to-date yields in October. The threshold for making the top 10 also slipped, to 18.93% from 19.01%.
That combination may reflect the changing conditions facing Nigeria’s fixed-income market. The Central Bank of Nigeria reduced its Monetary Policy Rate from 26.50% to 23.00% in September, and fixed-income yields have moderated.
Yet money-market funds continue to attract investors seeking access to short-term securities and relatively easy access to their money.
The expansion is notable in the context of the wider mutual-fund industry. Nigeria had 50 money-market funds as of October 30, following the addition of Custodian Money Market Fund.
Together, they accounted for 68.31% of the industry’s N10.09 trillion in mutual-fund assets. The category’s size points to its central role in the investment market: it is no longer a niche option for investors seeking short-term placements.
But sector growth should not be confused with the performance of the funds at the top of the league table. The 10 highest-ranked funds collectively managed N241.97 billion 3.51% of total money-market assets.
In other words, strong returns among the top-ranked products do not describe the performance or size of the whole category.
The difference between yield and scale is also visible within the top 10. First Ally led the ranking with a 21.17% year-to-date yield and N15.87 billion in assets.
Coronation, ranked third, held N126.28 billion, making it the largest fund in the group by assets and the most widely held, with 24,716 unitholders.
Higher placement in a yield ranking does not necessarily mean a fund is larger or has more investors.
That distinction matters because a ranking answers a narrow question: which funds reported the strongest returns over the measured period? It does not, by itself, reveal whether the same performance will continue, how each fund’s underlying portfolio is positioned, or whether it suits a particular investor’s needs.
The figures are year-to-date yields, not guaranteed returns for the months ahead. A fund’s past performance can change as market rates and portfolio holdings shift. The October data itself illustrates that movement: First Ally remained first, but its yield fell by 0.26 percentage points from September’s 21.43%.
Coronation dropped 0.80 percentage points to 20.31%, the largest decline among funds that stayed in the top 10. CardinalStone was the exception among those seven, edging up from 19.31% to 19.38%.
The turnover beneath the top 10 also suggests a competitive market. Custodian entered the ranking at sixth with a 19.52% yield, while Page and Zedcrest returned to the list.
Comercio Partners, Greenwich Plus and Myrtle Nest, all ranked in September’s top 10, fell out in October. Greenwich Plus, which had featured in every monthly top 10 from January to September, dropped to 16th with a yield of 18.54%.
Such movement helps explain why monthly rankings can be an imperfect guide to longer-term performance. A fund’s appearance near the top in one month may not mean it will remain there; a fund that falls outside the top 10 may still have substantial assets or a long record of participation.
STL, for instance, finished tenth in October, just 0.01 percentage point ahead of Comercio Partners, which ranked 11th.
The steady rise in investor numbers is perhaps more revealing than the monthly ordering. Money-market funds added more than 49,000 unitholders in October, up from the 31,713 added in September.
This acceleration suggests households and institutions are continuing to allocate money to the funds, even as returns across the sector begin to adjust.
That demand may reflect the appeal of liquidity and relative stability, especially when investors want an alternative to holding cash without committing to longer-dated investments.
However, the category’s popularity should not obscure the fact that funds can differ in size, portfolio strategy, fees and liquidity terms. A sector-wide expansion does not mean each fund has identical risk or performance.
The policy-rate reduction also raises a forward-looking question for the industry. If market rates continue to soften, money-market funds may find it harder to sustain the returns that helped attract investors. Funds that have already accumulated assets and unitholders may face a challenge: retaining that confidence if returns decline further.
For investors, the October ranking offers a snapshot of performance, not a forecast. First Ally’s lead and the near-19% entry threshold show that yields remained substantial during the measured period.
At the same time, the moderation among most top-ranked funds signals that the conditions behind those returns are changing.
Nigeria’s money-market sector is expanding in both capital and participation. The next test is whether it can continue to attract investors as yields adjust and whether investors can distinguish between a fund’s past ranking and the risks and returns it may deliver next.
