Best Mutual Funds To Invest In Nigeria

Mutual funds are a great way to earn passive income and diversify your assets while minimising risks and increasing your earnings. In Nigeria, there are about 107 mutual funds to choose from. These include bond funds, equity-based funds, ethical funds, exchange-traded funds, fixed-income funds, infrastructure funds, mixed funds, money market funds and real estate funds.

When looking for the best mutual fund to invest in, it's important to consider your investing goals and risk tolerance, understand the fund's investment strategy and management approach, research its performance and pricing history, and pick a fund backed by a reputable financial company with affordable operation fees.

- Stanbic IBTC Aggressive Fund

- FBN Nigeria Smart Beta Equity Fund

- Meristem Equity Market Fund

- EDC Fixed Income Fund

- FBN Bond

- FBN Halal Fund

- FBN Money Market

- FBN Balanced Fund

Best mutual funds for short-term financial goals

When considering the best mutual funds for short-term financial goals, it is important to assess your risk tolerance, the fund's investment strategy, its historical performance, fees, and the reputation of the financial company backing the fund. Here are some options for the best mutual funds for short-term financial goals in Nigeria:

FBN Money Market Fund

The FBN Money Market Fund is a short-term mutual fund offered by FBNQuest, the asset management subsidiary of FirstBank of Nigeria. This fund invests in a range of instruments, including treasury bills, commercial papers, banker's acceptances, and certificates of deposits from rated Nigerian banks. It has a low initial investment requirement of N5,000 and has demonstrated stable performance and price history. As of September 2022, it reported a Year-to-Date return of 10.36%.

Stanbic IBTC Dollar Fund

The Stanbic IBTC Dollar Fund is a mutual fund that offers a conservative investment strategy. It is suitable for investors seeking capital preservation and stable returns. The fund invests in a mix of instruments, including money market securities and high-quality short-term debt instruments. The fund aims to provide a stable value for your investment and protect against currency fluctuations.

United Capital Balanced Fund

The United Capital Balanced Fund offers a balanced approach by investing in a mix of equity and fixed-income instruments. This fund is suitable for investors seeking capital appreciation and a regular source of income. It provides exposure to a diversified portfolio of stocks and fixed-income securities, helping to minimise risk while maximising returns. The fund is managed by a reputable financial institution, ensuring expert management of your investment.

Lotus Halal Fixed Income Fund

The Lotus Halal Fixed Income Fund is a sharia-compliant mutual fund that focuses on fixed-income instruments. This fund is ideal for investors seeking stable returns with a low-risk profile. It invests in a range of instruments, including government and corporate bonds, Sukuk, and other ethical investment avenues. The fund is regulated and follows sharia-compliant investment guidelines.

ARM Fixed Income Fund

The ARM Fixed Income Fund is a mutual fund that focuses on fixed-income instruments, including bonds, treasury bills, commercial papers, and other money market instruments. This fund is suitable for investors seeking regular income and capital preservation. It provides stable returns with relatively lower risk compared to equity-focused funds. The fund is managed by a reputable asset management company, ensuring professional expertise.

These mutual funds offer strong options for short-term financial goals, providing diversification, professional management, and accessibility. Remember to conduct your own research and consult with a financial advisor to ensure that the chosen mutual fund aligns with your investment objectives and risk tolerance.

Best mutual funds for medium-term financial goals

Medium-term financial goals are typically those that you want to achieve in the next few years. For such goals, you may want to consider a balance of stock funds and bond funds, or even lean more towards the latter. Here are some of the best mutual funds for medium-term financial goals in Nigeria:

FBN Bond Fund

Ranked as the best mutual fund in Nigeria by FBNQuest, the FBN Bond Fund provides access to a diverse portfolio of federal and state government bonds, as well as corporate bonds from highly-rated organisations. This fund preserves a high degree of liquidity while maximising returns. It has a stable performance and price history, reporting a Year-to-Date return of 11.49% on September 29, 2022. The initial investment sum is N50,000, with annual dividends paid to the investor.

FBN Balanced Fund

Also offered by FBNQuest, the FBN Balanced Fund is another great option for medium-term financial goals. It manages risk by balancing funds across a diverse range of asset classes, including stocks from high-quality Nigerian companies, long-term debt instruments from federal and state governments, as well as high-yield money market securities such as treasury bills and commercial papers. This fund also has a stable performance and price history, reporting a Year-to-Date return of 10.24% on September 29, 2022. The initial investment sum is N50,000, with dividends paid annually.

Stanbic IBTC Conservative Fund

The Stanbic IBTC Conservative Fund is a good option for those with a low-risk appetite. It is a member of the Stanbic IBTC Umbrella Funds, which typically invests a minimum of 40% of its assets in the equity market and 60% in fixed-income securities. With a minimum investment of just ₦5,000, this fund offers liquidity and a steady threshold of low to medium volatility.

EDC Fixed Income Fund

The EDC Fixed Income Fund is ranked as one of the top 3 mutual funds in Nigeria. It invests in a range of debt securities, bank placements, bonds, commercial papers, and other fixed-income investment vehicles. This fund caters to those who are risk-averse or willing to take minimal risks, offering accessible liquidity and liability management while avoiding risks associated with equity investments. The minimum capital requirement for the EDC Nigeria Money Market Fund is ₦5,000, while the Fixed Income Fund requires a minimum of ₦50,000.

United Capital Balanced Fund

The United Capital Balanced Fund is another option to consider for medium-term financial goals. While specific performance details are not available, this fund can be invested in with any amount and can be tracked in real time.

When choosing a mutual fund for medium-term financial goals, it is important to assess your risk tolerance and ensure that the fund's investment strategy and management approach align with your goals. Additionally, consider the fund's fees and performance history to make an informed decision.

Best mutual funds for long-term financial goals

Mutual funds are a great way to earn passive income and diversify your portfolio while minimising risks. Here are some of the best mutual funds in Nigeria for long-term financial goals:

FBN Bond Fund

The FBN Bond Fund offers access to a diverse portfolio of federal and state government bonds, as well as corporate bonds from highly-rated organisations. This fund has a built-in diversification strategy, preserving a high degree of liquidity while maximising returns. It has a stable performance history and a low initial investment requirement of N50,000, making it accessible to a wide range of investors.

FBN Halal Fund

The FBN Halal Fund is ideal for investors seeking Shariah-compliant investments. This fund invests in assets that adhere to religious and moral norms while offering competitive returns equivalent to conventional funds. With a starting investment of N5,000, the FBN Halal Fund is perfect for long-term income generation.

FBN Balanced Fund

The FBN Balanced Fund is a well-rounded option, managing risk by balancing funds across a diverse range of asset classes. It invests in stocks from high-quality Nigerian companies, long-term debt instruments, and high-yield money market securities. With a minimum investment of N50,000, this fund has delivered stable performance and is suitable for those seeking long-term capital growth with regular income distribution.

Stanbic IBTC Aggressive Fund

The Stanbic IBTC Aggressive Fund offers competitive returns and is suited for investors with a high-risk appetite. It typically invests a minimum of 60% of its assets in the equity market and the remaining in fixed-income securities. The fund is managed by Stanbic IBTC Asset Management and has a minimum investment requirement of ₦5,000.

FBN Nigeria Smart Beta Equity Fund

The FBN Nigeria Smart Beta Equity Fund is ideal for high-risk investors with long-term financial goals. This fund focuses on investing in stocks across all sectors listed on the Nigerian Stock Exchange, adopting a highly research-based and time-tested evaluation system. With a minimum investment of ₦50,000, it offers long-term capital preservation and competitive returns.

Coronation Fixed Income Fund

The Coronation Fixed Income Fund is a low to medium-risk mutual fund that provides an opportunity to save for long-term financial needs. It invests in a broad portfolio of fixed-income securities, including government and corporate bonds, treasury bills, and other money market securities. The fund is easily accessible for contributions and withdrawals, making it a flexible option for long-term investors.

These mutual funds offer a diverse range of investment strategies and cater to different risk appetites. It is important to conduct thorough research, considering factors such as investment goals, risk tolerance, fund performance history, and management approach before making any investment decisions.

Best mutual funds for low-risk investors

When considering the best mutual funds for low-risk investors, it is important to assess your financial goals and risk tolerance. Here are some options for low-risk mutual funds in Nigeria:

FBN Bond Fund

Ranked as the top mutual fund in Nigeria by FBNQuest, the FBN Bond Fund offers access to a diverse portfolio of federal, state, and corporate bonds. It maintains high liquidity while maximising returns. The fund has a stable performance history, reporting a 11.49% Year-to-Date return as of September 29, 2022. The initial investment requirement is N50,000, with annual dividends paid to investors.

FBN Money Market Fund

Also offered by FBNQuest, this mutual fund invests in short-term instruments such as treasury bills, commercial papers, banker's acceptances, and certificates of deposits from rated Nigerian banks. It requires a minimum investment of N5,000 and has a stable performance history. As of September 2022, it reported a Year-to-Date return of 10.36%.

Stanbic IBTC Conservative Fund

Part of the Stanbic IBTC Umbrella funds, this fund is suitable for low-risk investors. It typically invests 40% of its assets in fixed-income securities, providing a steady and less volatile option. The fund is managed by Stanbic IBTC Asset Management, and you can start investing with as little as ₦5,000.

EDC Fixed Income Fund

Ranked as one of the top 3 mutual funds in Nigeria, the EDC Fixed Income Fund caters to risk-averse investors. It invests in various fixed-income instruments, including debt securities, bank placements, bonds, and commercial papers. The fund aims to provide accessible liquidity and liability management while avoiding the risks associated with equity investments. The minimum capital requirement for the EDC Nigeria Money Market Fund is ₦5,000, while the Fixed Income Fund requires a minimum of ₦50,000.

United Capital Fixed Income Fund

This fund is included in Cowrywise's list of mutual funds and is likely suitable for low-risk investors. However, specific risk information is not available.

When considering these or any other mutual funds, it is essential to conduct thorough research, understand the fund's investment strategy and management approach, and assess its performance history and fees.

Best mutual funds for high-risk investors

When looking for the best mutual funds to invest in, it's important to consider your financial goals and risk tolerance. Here are some options for high-risk investors looking to invest in mutual funds in Nigeria:

FBN Nigeria Smart Beta Equity Fund

With a minimum starting investment of ₦50,000, this fund is best suited for high-risk investors with long-term goals. It is an equity-based fund that invests in stocks across all sectors listed on the Nigerian Stock Exchange, offering competitive returns. The fund provides long-term capital preservation by investing at least 75% in a diversified portfolio and 25% in short-term money market instruments for liquidity.

Stanbic IBTC Aggressive Fund

The Stanbic IBTC Aggressive Fund offers competitive returns, diversification, aggressive allocation, liquidity provision, and maintains a low to medium volatility threshold. It typically invests a minimum of 60% of its assets in the equity market and 40% in fixed-income securities. This fund is suitable for investors with a high-risk appetite. The minimum investment amount is ₦5,000, and the funds are managed by Stanbic IBTC Asset Management.

Meristem Equity Market Fund

The Meristem Equity Market Fund, managed by Meristem Wealth Management Limited (MWML), focuses on investing in equity securities listed on the Nigerian Stock Exchange. It is an open-ended mutual fund with a minimum initial investment requirement of just ₦10,000. Customers have praised them for their exceptional customer service and relationship management, in addition to the high yields and net asset value the fund provides.

FBN Bond

The FBN Bond Fund provides access to a diverse portfolio of federal and state government bonds, as well as corporate bonds from highly-rated organisations. It preserves a high degree of liquidity while maximising returns. The initial investment sum is N50,000, with annual dividends paid to investors. The fund has a stable performance and price history, reporting a Year-to-Date return of 11.49% on September 29, 2022.

Lotus Halal Fixed Income Fund

Although specific details about this fund are scarce, it is mentioned as an option for investing in mutual funds in Nigeria.

It is important to note that investing in mutual funds carries risks, and past performance does not guarantee future results. Before investing, it is advisable to conduct thorough research, understand your financial goals and risk tolerance, and consider seeking independent financial advice.

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