Nigeria’s economic landscape has been anything but stable—and if you’ve been paying attention to inflation, interest rates, and market swings, you already know how quickly your savings can lose value.
This is where mutual funds come in. They allow you to grow your money, manage risk, and protect your portfolio—all without needing to be a market expert.
Whether you’re new to investing or looking to strengthen your current portfolio, this guide will walk you through the major mutual fund types, what to look out for, and how to build a portfolio that withstands Nigeria’s economic ups and downs.
Before choosing a fund, it helps to understand how each one works—and what they offer in today’s market.
These invest in short-term government securities like Treasury Bills. They offer stability and quick access to cash.
Average yield (2025): ~18–22%
Risk level: Low
Best for: Emergency savings, short-term goals, capital protection
Money market funds rarely beat inflation, but they protect your capital and offer steady returns.
These invest in long-term bonds (government and corporate). Returns are stable but influenced by interest rate movements.
Typical returns: 12–15%
Risk level: Moderate
Best for: Medium-term savings, monthly income, stability
These primarily invest in stocks and offer the highest growth potential—but also the highest volatility.
Some 2025 returns have crossed 50–160%, driven by renewed market optimism
Risk level: High
Best for: Long-term wealth building, high-growth investors
A mix of stocks and bonds, designed to give you growth and stability at the same time.
2025 average returns: ~33%
Risk level: Medium
Best for: Moderate investors who want growth but still want safety
These include:
Halal / Shariah funds
ESG ethical funds
Eurobond / Dollar mutual funds
Dollar funds are especially helpful for Nigerians looking to hedge against naira depreciation.
What are you investing in?
Long-term goals (retirement, property, wealth growth): Go for equity or balanced funds
Short-term goals (school fees, business cash flow, emergency savings): Choose money market funds
Your timeline will determine the best fund type.
Be honest about how much volatility you can handle.
If you hate seeing your account go up and down, stick to money market or fixed income funds
If you can stomach short-term dips for long-term gains, Equity or balanced funds are great picks
Past performance is not a guarantee—but it helps you understand how well the fund has been managed.
Look at:
3–5 year returns
Consistency across market cycles
How the fund compares to its peers
Avoid chasing a fund just because it had one “hot” year.
The best funds usually have experienced managers behind them.
Top-performing managers in Nigeria include:
Stanbic IBTC Asset Management
ARM Investment Managers
FBNQuest
Chapel Hill Denham
Meristem
Every fee reduces your final return.
Look out for:
Management fees
Admin charges
Exit fees (where applicable)
Choose funds with competitive expense ratios.
A well-diversified mutual fund protects you from downturns in any single market.
Check:
Sector diversification
Asset class mix
Currency exposure
Spread your investments across multiple funds with varying risk levels. For example:
This approach provides a safety net while still allowing for growth potential.
Review your mutual fund holdings quarterly. If equity funds have grown significantly, consider moving some profits to more conservative options to maintain your desired risk level.
Consider allocating a portion to Eurobond or Dollar funds to protect against naira depreciation, especially important in Nigeria's currency environment.
As of November 2025, equity mutual funds are leading with returns over 160%, while money market funds are yielding about 22%—just enough to match inflation. With interest rates trending downward and inflation cooling to 18.02% (down from 24% in January), investors should consider a balanced approach rather than relying solely on fixed-income instruments.
Compare the best mutual funds in Nigeria today on nairaCompare