It is the sixth month of the year, and the investment landscape has shifted again; tight monetary policy, rising inflation, relative exchange rate stability, and positive economic growth.
The Central Bank of Nigeria retained the Monetary Policy Rate at 26.5%, keeping interest rates elevated and supporting attractive yields in Treasury Bills, OMO bills and FGN bonds.
Inflation also increased to 15.69% in April 2026, from 15.38% in March, meaning investors must now focus on assets that can deliver returns above rising inflation.
The naira traded around N1,375/$1 at the official market in late May, offering some stability for investors watching currency risk.
At the same time, Nigeria’s economy expanded by 3.89% year-on-year in Q1 2026, supported by growth in services, agriculture, construction, ICT and financial services. This macro backdrop will shape investment flows in June.
May 2026 confirmed that Nigerian equities remain one of the strongest-performing asset classes, but it also showed that investors need to be more selective.
- The broad market rally was impressive, with the NGX All-Share Index gaining about 60.9 % YTD, but not all sectors moved with the same strength.
- Oil and gas remained the best-performing index at about 124% YTD in May, although slightly lower than April’s 128%, driven by strong growth in Aradel and Seplat.
- The Industrial goods index showed stronger momentum, rising from 99% YTD in April to 116% in May.
- Banking stocks remained attractive but more selective, while insurance became more volatile after a sharp reversal from April.
As we enter June, the principles are still the same: investors should seek inflation-beating returns, demand higher rewards for higher risk, and focus on risk-adjusted returns across stocks.
Equities market: Still the strongest growth asset, but stock selection now matters more
The Nigerian equities market remains the strongest growth asset going into June 2026, with over 30 stocks delivering triple-digit year-to-date gains and about 79 stocks returning above the April inflation rate of 15.69%.
However, the argument for simply “buying the market” is becoming weaker. After the broad market rally and the sharp gains recorded by several individual stocks, investors now need to be more selective.
The market has already moved significantly. At this stage, the better question is no longer whether equities are attractive, but which equities still offer a reasonable upside potential, liquidity, and risk-adjusted return.
More importantly, investors must now ask whether corporate earnings are rising fast enough to justify the rally.
- A stock may have delivered a strong price return, but if earnings growth does not catch up, valuation risk increases.
That is why June should be approached as a stock-selection month, not a broad-market buying month.
Where to go in June
For conservative equity investors, the better names are Dangote Cement, Seplat Energy, Zenith Bank, GTCO, and Airtel Africa.
These stocks may not offer the most upside, but they provide a stronger balance of liquidity, market leadership, earnings visibility and sector strength.
- Dangote Cement remains attractive because industrial goods continued to strengthen in May, with the sector index rising to 115.74% year-to-date. The stock also gained 21.65 per cent in May, showing fresh momentum.
- Seplat offers quality exposure to oil and gas, the best-performing sector index.
- Zenith and GTCO remain core banking names with strong liquidity and institutional appeal.
- Airtel Africa also stands out in ICT, combining large-cap status with a 21.00% May return.
- MTN Nigeria is also worth watching despite losing over 10% in May, given its size, market leadership and earnings potential.
For investors willing to take more risk, Zichis, Fidson, CAP, Fidelity Bank, Berger Paints, eTranzact and UPDCREIT offer stronger momentum.
- Fidson and CAP delivered strong year-to-date and May gains.
- Fidelity Bank was the strongest banking momentum play in May.
- Berger Paints, eTranzact and UPDCREIT also posted sharp May rallies.
The key point is that equities remain compelling, but June should reward selectivity more than broad exposure.
Investors should focus on stocks where earnings, liquidity, and sector tailwinds can still support the rally.
Fixed income: Attractive yields, but stay selective
Fixed income remains attractive going into June 2026, especially for conservative investors seeking income and capital preservation.
With the Monetary Policy Rate at 26.5% and inflation at 15.69%, selected fixed-income instruments still offer positive real returns.
- Treasury Bills remain one of the cleanest options. FMDQ’s NITTY curve showed the 9-month and 12-month tenors at about 18.39% and 18.89%, respectively, as of May 25, 2026.
- FGN bonds also offer value, with medium tenor yields around 16.5% to 17.0%, including the 18.50% FGN February 2031 bond at 17.01% as of May 26, 2026.
- Commercial papers offer higher yields. So far this year, about 24 companies have issued commercial papers, with disclosed rates ranging from 17% to 24.5%, and an average of about 22.5%.
For June, Treasury Bills remain the best conservative option, FGN bonds suit longer-term income investors, while commercial papers are better for investors willing to take corporate credit risk for higher yield.
Mutual funds: Risk appetite matters
Mutual funds remain useful for diversification and professional management.
According to the SEC CIS weekly report ended April 30, 2026, equity-based funds delivered the strongest average return, with an average YTD yield of about 56.21%, supported by the rally in Nigerian equities.
- Standout funds include Zedcrest Equity Fund, Halo Equity Fund, Zrosk Magna Equity Fund, Paramount Equity Fund, and CardinalStone Equity Fund.
However, past performance does not guarantee future returns. With inflation expected to rise further in May and June, and interest rates still elevated, investors should match fund choices with risk appetite.
For aggressive investors, Zedcrest Equity Fund stands and for investors seeking scale, Stanbic IBTC Nigerian Equity Fund is better.
Conservative investors may prefer money market and fixed-income funds, while balanced investors can consider REITs, especially UHOMREIT and UPDCREIT.
Alternative assets: Useful for diversification.
Alternative assets such as gold and crypto remain useful for diversification, but they are not the strongest return options going into June 2026.
Gold stayed positive year-to-date, with Comex gold up about 5.43% YTD by the end of May, according to WSJ commodities data.
- This makes gold more of a defensive hedge than a high-return asset, especially when compared with Nigerian equities and high-yield fixed income.
Crypto was weaker. Bitcoin started the year around $88,722 and traded around the $74,000–$78,000 range in late May, while Ethereum remained volatile around $2,000–$2,300.
For June, gold may appeal to investors seeking a hedge against inflation, currency pressure or global uncertainty, while crypto remains suitable only for investors with high-risk appetite.
Overall, June 2026 presents a market where returns are still available, but selectivity is now more important than broad exposure.
- Equities remain the strongest growth asset; fixed income offers attractive income for conservative investors.
- Mutual funds provide diversified access, and alternatives such as gold can serve as hedges.
The best strategy is not to chase past winners blindly, but to match each asset class with strong risk-adjusted return, inflation expectations, and the direction of interest rates.
