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Mutual Funds in Nigeria; Overview, How to Invest, List of Sellers and Their Rates, Benefits

There is not a much better way to get more from your money in terms of revenue returns than investing in mutual funds in Nigeria. It is a lucrative venture as investors benefit from their investment because it enables them to diversify their risks.

The beauty about investing in mutual funds is that investors are sure of a regular income through the efficient management of the scheme by competent hands. In some cases, income might be annually, semi-annually or monthly depending on the performance of the investment concerned.

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As a beginner (First-time investor), you might want to know what mutual funds are, how it works and which mutual fund is best to invest in. Getting acquainted with the rudiments of mutual funds is quite essential as it gives more insight on what to expect from your investment on both a short-term and long-term basis.

What are Mutual Funds?

Mutual funds are investment schemes managed professionally by mutual funds managers. The managers of the funds keep a thorough record of the growth and performance of the funds and make alterations to ensure that investors receive the best possible returns from their investment.

Mutual funds can also be defined as investment companies that offer their services to investors by investing their money in various businesses with the sole aim of maximizing their wealth.

The Asset Management Company (AMC) sees to the management of mutual funds as the company is responsible for the collection of funds from a group of investors to invest the funds in stocks, bonds and securities.

Investors of mutual funds are opened to a portfolio of investments invested on their behalf by the funds manager and the profit derived from the diversified pool of investments are shared amongst them annually, semi- annually or monthly as stipulated in the fund prospectus.

In Nigeria, mutual funds are operated by the investment arm of banks, investment banks, stock brokerage firm, etc. These investment firms are run by professionals who are knowledgeable about the capital and money market.

It is said that money invested in the money market is secured than the capital market as the risks associated with securities in the capital market is higher than that of the money market and as such the funds manager ensures that the investors’ money is safe by investing in the money market.

Mutual funds are a good prospect as it encourages savings for the future. You are no longer at a loss when it comes to deciding where to invest your money as the mutual fund is a better solution as it gives investors a portfolio of heterogeneous instruments rather than a single investment with a high risk of failure.

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Knowing if investing in a mutual fund is a good idea would require you to know more about the successful history of the investment firm before investing your money.

To get higher returns from investment in mutual funds, you should know that there are three categories of mutual funds that you might likely choose which one is best suitable for you.

The types of mutual funds available are Fixed income funds, Equity funds and Mixed-income funds. There is a high level of risks involved in investments as well as other businesses and the higher the returns you seek from an investment, the higher the risk that comes with such investments.

The different types of mutual funds comes with its benefits. The fixed income funds are the type of funds that comes with low to medium risks, investors here receive stable revenue from investing in various debt securities.

Equity funds are mutual funds of long-term investment in other to grow capital and the risk here is high as well as the returns.

Mixed Funds are mutual funds that comes with low risks and as such it attracts low returns for investors. These type of mutual funds is the combination of both fixed income funds and equity funds because of its diversified nature.

Small investors can also invest in mutual funds as it grants them access to professionally managed, diversified portfolios of bonds, equities and other securities. Each shareholders participates proportionally in the gain or loss of the funds.

Mutual funds can be open-ended in the sense that new investors can join at anytime and investors who don’t wish to continue can resell their shares. Open ended funds are unregulated.

Mutual funds can also be close ended leaving no room for new investors as shares sold here are limited. Close ended mutual funds are regulated by the Securities and Exchange Commission as well as the NSE

Read Also: How to Become a Stockbroker in Nigeria

How to Invest in Mutual Funds in Nigeria

If you are clueless as to how to invest in Mutual Funds in Nigeria then be rest assured as it is not a difficult task.

As a first time investor, you might be wondering the best investment scheme that would bring you great returns at manageable risks, mutual funds is just the answer you are looking for.

But you don’t know the procedure it entails in investing in Mutual Funds in Nigeria. The following are the steps to follow if you want to invest in Mutual Funds in Nigeria

-Looking for a good investment firm is just the first step. Stock brokerage firm, Investments bank offers this services.

-You can invest as little as #5000 and a maximum of #1, 000,000 depending on the money you have to invest and the risks you are willing to take.

-The funds manager gives you a contract stating the percentage of profit to be received from your investment either annually, quarterly or on monthly basis.

-The rest lies in the hands of the funds manager as he is responsible for the diversification of your investment for effective results.

Read Also: The 20 Richest Men in Nigeria – Their Net Worth, Investments

List of Mutual Funds Sellers and Their Rates

1. First Bank Capital Limited

The mutual funds offered by First Bank Capital Limited are:FBN Money Market Fund, FBN Fixed Income Fund and FBN Heritage Fund.

The mutual funds of FBN are considered to be the safest as it is perfect for those who are not looking to invest a large sum of money at once.

The initial investment for FBN is at least #10, 000 and revenue are paid quarterly. The interest rate on FBN mutual funds is 14%.

2. Assets & Resources Management

Mutual Funds offered by ARM are: ARM Discovery Fund, ARM Money Market Fund, ARM Ethical Fund and ARM Aggressive Growth Fund.

ARM allows a minimum #5000 for investment and revenue is paid quarterly. The interest rate on ARM mutual funds is 15.97%. The risks associated with the investment of ARM is low.

Read Also: 7 Social Investment Programmes in Nigeria to benefit from this year

3. Zenith Capital Limited

The mutual funds offered by Zenith Bank Limited are: Zenith Income Fund, Zenith Equity Fund and Zenith Ethical Fund.

4. Stanbic IBTC Asset Management Limited

  • Mutual funds offered by SIAML are:
  • -Stanbic IBTC Money Market Fund
  • -Stanbic IBTC Equity Fund
  • -Stanbic IBTC Guaranteed
  • -Stanbic IBTC Bond Fund
  • -Stanbic IBTC Imaan Fund
  • -Investment Fund

5. United Bank of Africa Asset Management Limited

Mutual funds offered by UBAAML are:

  • -UBA Bond Fund
  • -UBA Money Market Fund -UBA Equity Fund
  • -UBA Balance Fund

Read Also: List of 28 Banks in Nigeria and their Websites

Benefits of Mutual Funds in Nigeria

Mutual funds are opened to small investors and there is a guarantee of revenue returns on investment as investment are diversified by funds managers on behalf of the investors.

Mutual funds are also regulated by the government and as such the investment is safe.

Mutual funds are managed by professional managers that ensures that investors get more from their investment.

Related: 7 Steps To Buy Stocks In the Nigeria Stock Market


Mutual funds is the best opportunity available to investors who are looking to expand their savings and it is best for having more than one investment.

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Ifiokobong Ibanga

Ifiokobong Ibanga is the founder of InfoGuideNIgeria.com. You can get in touch with him on Instagram @ifiokobong. If you need a personal assistance on this topic, kindly send a message. Much Love!

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