The search for yield by Nigerian investors continues to be the motivating factor for choosing what to invest in. Analysis conducted by Quantitative Financial Analytics, on the inflows and outflows into and from Nigerian mutual funds, shows that FBN Money Market Fund attracted the largest inflow in the month of January, 2019.
Total inflows higher than total outflows
According to the analysis, mutual funds in Nigeria attracted an estimated inflow of N47.5 billion and suffered outflows totalling N13.3 billion. Inflows are new money that investors pour into mutual funds by way of subscriptions, while outflows constitute withdrawals by investors who may decide to either take their money from the funds or transfer/switch such money to other funds.
FBN Money Market Fund’s inflow
Of the N47.5 billion inflow, N23.2 billion went to FBN Money Market Fund while N4.4 billion went to Stanbic IBTC Money Market Fund, with N2.8 billion each going to Abacus Money Market Fund and Stanbic IBTC Dollar Fund.
With that huge inflow, FBN Money market fund consolidates its position as the second largest mutual fund by asset in Nigeria while the fund manager, FBN Asset Management Limited, also consolidates its position as the second largest fund management company in Nigeria.
Stanbic IBTC Money Market and Stanbic IBTC Asset Management still at the top
Stanbic IBTC Money Market Fund and its manager, Stanbic IBTC Asset Management company, still occupies the enviable positions of the largest fund and fund manager in Nigeria, respectively. Stanbic has occupied this position since Quantitative Financial Analytics began tracking Nigerian mutual funds over five years ago.
The Quest for High Yield
The huge inflow is mostly being driven by the quest for yield by investors. The FBN Money Market Fund yields 14.2%, the highest among mutual funds in the current market. Its rivals, Stanbic IBTC Money Market Fund, and ARM Money Market Fund are yielding 13.24 and 13.36 respectively.
These are higher than what is currently obtainable from FGN Savings Bonds and most corporate commercial papers although FGN Savings bonds carry less risk. Compared to available information on yields on money market funds in Nigeria, FBN Money Market fund is currently having the highest yield and it is therefore of no surprise that investors are noticing that and therefore rewarding that performance with increased amount of inflows and subscriptions.
