Returns on Nigeria’s Collective Investment Vehicles (CIVs) Slump Mildly in July 2023

Nigeria’s collective investment vehicles (CIVs), comprising mutual funds, infrastructure funds, and Exchange Traded Funds (ETFs), posted a YTD return of 30% in H1 2023, primarily driven by currency volatility and increased investor interest. Amidst recently released 23% inflation data, this still presents a 7% real return in H1 2023. The mutual funds market also posted impressive returns as the market gained 32% in the first half of the year, particularly impressive given the 4.5% YTD return recorded in H1 2022. Analysts believe this positive turn for the market has been mainly owing to increased investor interest in allocating funds to alternative investment vehicles as investors seek to diversify their portfolios. Analysts have noticed a gradual moderation back to previous normal ranges because there has been a deceleration in gains week-on-week, despite total CIVs gaining 1% on average. Top performers so far in July have been the dollar-based funds and Shariah-compliant funds, while equity funds were at the bottom, wading in the negatives based on Securities Exchange Commission (SEC) data (See Chart 1 below)