Money Market Fund Returns in 2025 | Nigeria's Top Performing Funds

In a year when inflation remains stubbornly above 23 percent, Nigerian money-market funds have fought back with double-digit yields—several topping 24 percent year-to-date (YTD). Our deep-dive tracks Money Market Fund Returns in 2025, pinpoints the factors behind the outperformance, and spotlights the managers beating the pack.

Introduction to Money-Market Funds in Nigeria

Money-market funds (MMFs) pool investors’ cash into high-grade, short-term instruments such as Treasury Bills, Commercial Papers, and bank deposits, aiming to preserve capital while paying a steady yield. Because the funds are regulated by the Securities & Exchange Commission (SEC), Nigerians get professional credit screening, daily pricing,g and same-day liquidity—benefits a traditional savings account rarely matches. With average January 2025 YTD yields of 20.58 % across 38 funds—far richer than commercial-bank savings rates—MMFs have become the default parking spot for “idle” naira awaiting opportunity.

What Drives Money-Market Fund Returns in 2025?

Domestic forces dominate.

• Inflation: Headline CPI eased to 23.71 % in April after rebasing, but still erodes real returns.(Reuters, Nairametrics)
  
  
• Monetary Policy Rate (MPR): The CBN has held its policy rate at a record 27.5 % since February, keeping short-term yields elevated. Lawmakers have warned against pushing rates higher, signalling a ceiling.(Nairametrics)
  
  
• Liquidity: Broad money (M3) hit ₦114 trn in March—up 24 % YoY—providing the cash that funds recycling into bills and deposits.
  
  
• Fiscal supply: Jumbo FGN Sukuk at 19.75 % and NTB stop rates above 19 % anchor market pricing.(com)
  Global cross-winds – the US Fed’s pause at 4.25-4.50 % keeps dollar liquidity ample but risk-off.
  
  

Top-Performing Money-Market Funds (YTD Feb 2025)

Why These Funds Outperform

1. Shorter duration: Portfolios concentrate in sub-90-day NTBs, letting managers roll into every uptick in auction stop rates.
   
   
2. Credit spread capture: Smaller funds (e.g., EDC Class B) tactically buy tier-1 commercial papers 150-200 bp over NTBs.(Nairametrics)
   
   
3. Scale advantage: Mega-funds such as FBN (₦503 bn) negotiate superior fixed-deposit rates with banks, cushioning fees.(FBNQuest)
   
   
4. Active liquidity management: Weekly CBN NTB auctions and frequent OMO bills let managers arbitrage market mis-pricing.
   
   
5. Expertise & rating: Stanbic IBTC’s Aa-(f) rating and 21.55 % YTD show how process trumps pure chase-for-yield. Relative to the 91-day NTB benchmark (~20.7 % in April) most top funds hold a 300-400 bp spread, despite carrying almost identical risk.(stanbicibtcassetmanagement.com)
   

Key Considerations for Investors

• Risk is low, not zero: Credit events on commercial papers can hit NAV; stick with funds that cap CP exposure below 25 %.
  
  
• Liquidity: Check exit terms—Stanbic and FBN allow T+1 redemptions, while smaller boutiques may require two clearing days.
  
  
• Fees: TER ranges 0.7-1.5 % p.a.; anything above that will gnaw away at yield.
  
  
• Minimums: Most funds open at ₦5,000, but EDC Class B welcomes ₦1,000 entries—handy for first-time savers.
  
  
• Tax: Coupon income inside MMFs is tax-free for individual investors under current rules; corporates pay WHT on distributions.
  
  
• Real returns: With CPI at 23.71 %, only funds north of 24 % YTD deliver a slim positive real yield—factor this into your goal-setting.
  
  
  
  

  Outlook for the Rest of 2025

Analysts expect the MPC to keep the MPR at 27.5 % through Q3, with maybe a token 25-bp hike if food inflation flares. Treasury Bill stop-rates are likely to hover around 19-21 %, meaning YTD MMF returns could close the year in the 21-24 % band. A softening Fed by September and improved FX liquidity could compress local yields marginally, but any fiscal slippage keeps the bias upward. Investors eyeing higher real income may ladder maturities—locking some cash in six-month bank placements while keeping a core holding in agile MMFs.

Money Market Fund Returns in 2025 underline an uncomfortable truth: to beat inflation, you must shop for the best managers, not just the safest name. The Nigerian funds above prove it is still possible to earn a marginally positive real return in naira without taking equity-style risk. Use independent rankings, read monthly fact sheets and, when in doubt, stack your cash across two or three top-quartile MMFs to spread concentration risk. With discipline, you can let short-term instruments do the heavy lifting while you plan your next big investment move.

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