Coral, Zrosk, Stanbic top mutual funds with over 50% returns
The Nigerian mutual fund industry is having a standout year, with returns of investment on several funds surging above 50 percent in the first seven months of 2025.
Mutual Funds are created with the purpose of pooling funds from various investors who are willing to diversify their holdings.
The general growth of mutual funds is driven by the exceptional performance of equity mutual funds, which are outperforming their money market counterparts and the broader Nigerian Exchange (NGX), year-to-date.
BusinessDay analysis shows that five mutual funds reported returns on investment above 70 percent.
Coral Balanced Fund has had a super year so far, returning 84.19 percent to investors between January and July, 2025. It was followed by Zrosk Magna Equity Fund, which had a 77.49 percent yield in the period under review.
Stanbic IBTC Imaan Fund defied all the odds to return 76.19 percent to investors, with Halo Equity Fund giving back 75.40 percent to its investors. Guaranty Trust Equity Income Fund returned 74.48 percent.
Read also: Ten best-performing mutual funds in H1
Other mutual funds which have had a phenomenal year are: Stanbic IBTC Nigerian Equity Fund (66.37 percent), Paramount Equity Fund (65.82 percent), ARM Halal Balanced Fund (62.59 percent), ARM Aggressive Growth Fund (60.92 percent), and Balanced Strategy Fund (60.44 percent).
BusinessDay found that the average yield on the equity mutual funds listed on the SEC website so far this year is 50.95 percent – more than double the average performance of the money market mutual fund, which returned only 19.81 percent to investors within the same period.
Of the top 10 mutual funds, six were equity funds. This year, the equity mutual fund has largely dwarfed the money market mutual fund, thanks to the outstanding performance of the stock market. Equity mutual funds invest mainly in stocks.
Total assets under management reached N6.38 trillion, SEC said.
Money market funds
With money market fund returns on the decline, many investors are facing a tough choice: stick with a less risky option or switch to high-return-but-volatile equity funds.
Money market funds invest only in money market instruments such as treasury bills, commercial paper, and fixed deposits. The rates of the instruments determine the performance of the funds.
Declining inflation rates have led to a drop in rates of most money market instruments. With a drop in the inflation rate to 21.88 percent in July, stoking a likely rate cut, yields on the money market have been dropping.
Treasury bill yields dropped to 21.12 percent at the most recent auction last week, from 29.12 percent at the start of the year.
Equity funds offer high returns but with higher risk. The Nigerian stock market has done 37.3 percent year-to-date.
The highest-performing money market fund within the period was the RT Briscoe Savings & Investment Fund, with a return of 22.20 percent.
It was followed by Page Money Market Fund and Meristem Money Market Fund with returns of 22.14 percent and 22.09 percent, respectively.
Read also: From money market to equity: How mutual funds drive investors gains
Share purchase vs equity mutual funds investment
Investing in a share of a mutual fund is different from putting money in shares or stocks. Unlike stocks, investment in mutual fund shares does not give its holders any voting right. A share of a mutual fund represents investments in many different stocks (or other securities) instead of just one holding.
Equity funds performance
The top 10 equity mutual funds have done an average of over 48 percent – more than the performance of the NGX year-to-date.
The Zrosk Magna Equity Fund leads the list with a 77.9 percent return, followed by the Guaranty Trust Equity Income Fund at 74.5 percent and the Stanbic IBTC Nigerian Equity Fund at 67.8 percent.
The Paramount Equity Fund returned 63.3 percent to investors, with the ARM Aggressive Growth Fund yielding 59.9 percent and the Anchoria Equity Fund giving back 56.4 percent to investors.
Completing the list are Stanbic IBTC Aggressive Fund (55.1 percent), FBN Nigeria Smart Beta Equity Fund (52.8 percent), Legacy Equity Fund (51.5 percent), and Afrinvest Equity Fund (48.1 percent).
What investors must know
Ayodeji Ebo, managing director of Optimus, said on his YouTube page that investors need to understand their investment objectives and the levels of risks they can tolerate before selecting the type of mutual funds to invest in.
“You can determine your risk tolerance on your own or with the help of an investment professional, based on variables like your current age and retirement,” he said.
Olaolu Boboye, head of research at CardinalStone, said investors’ decision to choose from mutual fund classes is a function of what they want from their investments.
“Some want to run it as an emergency fund account. For people like these, money market fund is their best bet as it is faster to liquidate. Others have a huge risk appetite and do not know how to go about buying stocks, For them, equities mutual funds are their best bet,” he said.
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