Economy
Investors Snub Equity Mutual Funds Despite Stellar Performance
By Quantitative Financial Analytics
The year 2017 will go down the annals of financial history in Nigeria as the year that mutual funds visited investors with all manner of blessedness.
On average, equity-based funds returned 29.03 percent with the likes of ARM Aggressive fund retuning 58.06 percent, Legacy Equity Fund, 53.74 percent, Coral Growth Fund, 52.79 percent and ACAP Canary Growth Fund recording the lowest performance among equity funds with a whopping 16.57 percent.
In the same likeness, ETFs which are predominantly equity based, returned 38.78 percent on average, with Vetiva Banking ETF recording 50.25 percent, New Gold ETF, 47.87 percent and Vetiva Griffin 30 ETF, 45.98 percent.
All the Equity based funds and ETFs made gains of not less than 16 percent in 2017.
Surprisingly, a flow analysis carried out by Quantitative Financial Analytics’ analysts indicate that investors did not take advantage of the equity market performance. Cash flow analysis is a way of measuring investors’ attraction or appetite for mutual funds.
While every category of mutual funds recorded net inflows in 2017, only the equity fund and ethical fund categories recorded net out flow.
In 2017, the total estimated inflow to the industry stood at approximately N249 billion while outflows amounted to N63 billion leaving a net inflow of N186 billion.
As usual, money market funds attracted the greatest inflow in the amount of N221 billion but suffered outflows amounting to N40 billion, resulting in a net inflow of N181 billion.
Bond or fixed income funds attracted inflows of N18 billion while suffering outflows of N11 billion, leaving it with net inflow of N7 billion. The other categories of Real estate funds, ETFs, and Balanced funds, all ended the year with net inflows but the story is different for equity and ethical funds.
In the year under consideration, equity funds received N4 billion of inflows but suffered outflows in the sum of N8 billion, amounting to a net outflow of N4 billion.
As at March 2, 2018, the total asset of mutual funds in Nigeria was N512 billion out of which only 6.5 percent (N33 billion) is in equity funds.
Though the trend does not seem to be reversing so far in 2018, there appears to be some attraction to equity funds.
Within the first two months of 2018, the industry attracted a total of N98 billion inflows with N14 billion outflows. While N89 billion of those went to money market funds which suffered N10 billion of outflows (net-flow N79 billion), equity funds attracted N2 billion inflows and suffered N0.9 billion in outflows leaving that category of funds with positive net flow.
The reason for the lack of appetite or likeness for equity mutual funds could be because investors are still reeling from the losses made from the market crash of 2009, but for how long, one may ask.
Another reason could be the risk disposition of investors. While money market funds may not be yielding as much in bull markets, they tend to be less risky than equity funds and as such attractive to risk averse investors.
Yet another reason could be lack of data and information. In the Nigerian mutual fund industry, it is easy to get information on money market yields but not so easy to get such information on other categories of mutual funds.
This issue is even exacerbated by some blogs or articles on fund performance being thrown out there. Some of those blog/articles tend to overstate the performance of money market funds while understating that of other categories of funds because such blogs/articles ignore the effects of cash flows on performance calculations.
By lumping cashflows into the fund, they run the risk of interpreting changes in funds’ net asset value as due solely to performance. This erroneous interpretation tends to punish funds that suffer net outflows while rewarding those with net inflows.
It is important however, to note that past performance does not guarantee future performance so much such that the stellar performance of equity funds in 2017 does not indicate that they will perform as well or better in the future, so invest with caution.
By Adedapo Adesanya
The Senate has passed a bill to repeal and re-enact the law establishing the National Insurance Commission (NAICOM), paving the way for the regulatory agency to be renamed the Insurance Regulatory Commission (IRC).
The legislation, titled the Insurance Regulatory Commission (Establishment) Bill, 2026, was passed after the Senate considered and adopted the report of its committee on banking, insurance and other financial institutions.
The Chairman of the committee, Mr Adetokunbo Abiru, the senator representing Lagos East, who presented the report, stated that the proposed legislation was necessary because the existing National Insurance Commission Act of 1997 had become outdated and no longer reflected the realities of Nigeria’s evolving insurance industry or global regulatory standards.
According to the Senate, the decision to change the Commission’s name was informed by the need to eliminate confusion associated with the existing designation and to better reflect the institution’s regulatory mandate within Nigeria’s insurance industry.
The bill also provides legal protection for the commission and its officers against adverse claims arising from the lawful execution of their statutory duties.
However, he noted that the commission’s enabling law had become obsolete, exposing significant regulatory gaps that required urgent legislative intervention.
‘The current National Insurance Commission Act 1997 is outdated and does not adequately address the emerging economic growth, needs and development of the insurance business,” the lawmaker said.
He explained that the new legislation seeks to strengthen the independence of the commission by empowering it to make regulatory decisions without undue influence in the country’s insurance sector.
According to him, the bill also enhances the commission’s authority to exchange information and collaborate with domestic and international regulatory bodies, issue regulations, guidelines, standards and directives on insurance-related matters, and intervene more effectively in financially distressed insurance companies to protect policyholders and preserve financial stability.
This marks yet another move to strengthen the country’s insurance sector following the enactment of the Nigerian Insurance Industry Reform Act (NIIRA) of 2025 and the industry-wide recapitalisation exercise, which will wrap up by July 31.
By Adedapo Adesanya
About 143 companies that successfully passed the technical and prequalification stages of the Nigerian Upstream Petroleum Regulatory Commission’s (NUPRC) 2025 Licensing Round will, today, compete for 50 oil and gas blocks at the commercial bid conference in Abuja, the final stage in the allocation process for the assets.
The commission said only the prequalified companies have been invited to attend the event, which will hold at the Conference Centre of the Transcorp Hilton Hotel, Abuja, stressing that participation is strictly by invitation.
The commercial bid conference will determine the successful bidders for oil and gas assets located across Nigeria’s producing and frontier basins.
The 50 blocks comprise 16 onshore blocks and 18 shallow water blocks in the Niger Delta, one deep offshore block, three onshore blocks in the Benin Basin, four in the Anambra Basin, four in the Chad Basin, and four in the Benue Trough.
According to the commission, the winning bids will be determined through a transparent evaluation process based on clearly defined commercial parameters. These include the signature bonus offered by bidders, the proposed work programme commitment and the level of performance security provided. The final selection will be based on a weighted technical and commercial score.
The licensing round is being conducted under the provisions of the Petroleum Industry Act (PIA) 2021, which requires a transparent and competitive process for the award of petroleum assets.
NUPRC had announced the commencement of the 2025 Licensing Round on November 11, 2025, before opening the online bid portal on December 1, 2025, to enable interested companies to register and participate in the exercise.
To ensure prospective investors fully understood the requirements, the commission organised a pre-bid conference on January 14, 2026, at Eko Hotels and Suites, Lagos. The event provided detailed explanations on the licensing guidelines and bidding procedures to registered participants and other stakeholders.
Registration and submission of prequalification documents closed on February 27, 2026, while the prequalification evaluation was completed on March 16, 2026.
NUPRC disclosed that 286 companies initially submitted applications for prequalification.
Following the evaluation process, 196 companies were cleared to participate in the technical and commercial bid stages.
The prequalified 143 companies eventually submitted a total of 200 bids for the available oil and gas blocks. These companies are now set to compete at the commercial bid conference, where the financial offers will be opened and evaluated to determine the eventual winners.
The licensing round is expected to attract fresh investment into Nigeria’s upstream petroleum sector, boost exploration activities across both producing and frontier basins, increase crude oil and gas reserves, and support the country’s drive to grow production and government revenue.
It also underscores the regulator’s commitment to implementing a transparent, competitive and investor-friendly licensing regime under the Petroleum Industry Act.
By Adedapo Adesanya
The Monetary Policy Committee (MPC) of the Central Bank of Nigeria (CBN) has retained all key monetary policy parameters following the conclusion of its two-day meeting on July 21, 2026, on Tuesday, maintaining its tight monetary policy stance to curb inflation and support macroeconomic stability.
According to the Governor of the apex bank, Mr Yemi Cardoso, who chaired the committee, the Monetary Policy Rate (MPR), which serves as the benchmark interest rate, remains at 26.50 per cent. The MPC also retained the asymmetric corridor around the MPR at +50 basis points and -450 basis points.
In addition, the Cash Reserve Ratio (CRR) for commercial banks was left unchanged at 45.00 per cent, while the CRR for merchant banks remains at 16.00 per cent. The committee also retained the CRR on non-Treasury Single Account (Non-TSA) public sector deposits at 75.00 per cent, with the liquidity ratio at 30.00 per cent.
The decision reflects the apex bank’s continued commitment to containing inflationary pressures through a restrictive monetary policy while safeguarding the resilience of Nigeria’s financial system amid ongoing macroeconomic adjustments.
By keeping all policy tools unchanged, the MPC signalled its intention to continue managing excess liquidity in the banking sector and maintain stability in financial markets.
The move is also expected to provide greater policy certainty for investors and businesses monitoring the country’s monetary policy direction.
The latest decision also means borrowing costs are likely to remain elevated in the near term as the central bank continues to prioritise price stability over monetary easing.
Analysts had expected the CBN committee to retain the rate after Nigeria’s headline inflation came in at 15.91 per cent as of June 2026, marking a slight decline from 15.93 per cent in May.
However, even as overall price growth has moderated significantly compared to previous periods, food inflation remains a persistent challenge, accelerating to 17.52 per cent in June.
