Pension Funds Move to Corporate Debt Securities Amid Rising Interest Rates  

According to the data released by National Pension Commission, the Pension Funds Administrators have widened their investments in corporate bonds in the first seven months of 2022. The investment in corporate fixed-income securities rose by 41.1% to N1.371 trillion from N957.7 billion in the corresponding period in 2021, contrary to the +5.3% slight increase in equities investment to N1.020 trillion against N968.8billion in the previous year.

The PFA’s Investment allocation showed that corporate securities had a higher quota of 9.5% and equities had 7.1% of their total investments during the period. Diversifying corporate securities can be attributable to the rising interest rate and political uncertainty. Analysts believe the recent interest of institutional investors in corporate securities has driven the many issuances of commercial papers and corporate bonds in 2022.