October 5, 2020/Coronation Report
Mutual Funds are growing rapidly and are quickly becoming the default destination for Nigerians’ savings. Just as the Pension Funds began to take off a decade ago, now Mutual Funds are growing fast. The total value of Money Market funds rose by 11% and Fixed Income funds rose by 59% in the first half of this year. Mutual Funds are set to become a large part of the savings industry. In a few years, they may rival Nigeria’s Pension Funds in size.
In our new report ‘The Shifting the Appetite of the Nigerian Investor: From Savings to Mutual Funds, we explain the conditions behind this growth. The total Assets Under Management (AUM) of Nigeria’s Mutual Funds (also known as Collective Investments Schemes) rose by 305% in the period between 2015 and 2019, more than doubling in inflation-adjusted terms. As commercial banks progressively offered lower rates on Savings Accounts, more money switched to Mutual Funds. Also, the emergence of tech-based savings platforms introduced a new generation of young savers to Mutual Funds.
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