Investments in fixed income securities grew by 17.7% year-on-year (YoY) in the eight months ending August 2025, reaching N2.405 trillion from N2.043 trillion in the same period in 2024.

This was revealed in the latest Pension Funds Industry Portfolio Report by the National Pension Commission (PenCom), which provides a detailed overview of activities in the sector for the period.

What Are Fixed Income Securities?

Fixed income or money market securities include:

• Fixed deposits / bank acceptances
• Commercial papers
• Foreign money market instruments

Market experts attributed the rise in money market investments to the high Monetary Policy Rate (MPR) maintained by the Central Bank of Nigeria (CBN) over the past two years. The MPR serves as the benchmark interest rate for government and corporate securities in Nigeria.

The relatively low risk associated with money market securities has also made them an attractive option for pension fund investments.

Monetary Policy Trends

To curb rising inflation, the CBN had maintained a high MPR, peaking at 27.5% before a marginal reduction last month to 27%. According to analysts, the slight rate cut was aimed at supporting economic growth while balancing inflation, following a period of gradual disinflation.

Pension Fund Allocation

Vanguard’s review shows that money market securities now account for 9.28% of total pension fund assets, valued at N25.895 trillion.

Within this category:

• Fixed income securities dominated with N2.405 trillion, representing 77.8% of total money market investments.
• Commercial papers followed with N226 billion, accounting for 9.4%.
• Foreign money market instruments recorded N102 billion, or 4.2% of the total.

Analyst Perspective

Commenting on the development, David Adonri, Analyst and Vice Chairman, said:

“Investment in money market securities by Pension Fund Administrators (PFAs) is driven by attractive interest rates and the low-risk nature of these instruments. However, PFAs should continue diversifying their portfolios to achieve higher returns for investors.”