Nigerian Pension Fund Directors (PFAs) are focusing on larger returns from the equities market which has been on a rally this 12 months.
A latest survey by the Pension Fund Operators Affiliation of Nigeria (PenOp) reveals that fifty p.c of fund managers count on continued market progress, citing resilient sectors as key drivers.
In keeping with the report, inflation, foreign money volatility, and coverage uncertainty stay issues, however selective optimism prevails.
Regardless of these pressures, PFAs are figuring out worth in basically sturdy sectors akin to banking, telecoms, and shopper items.
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Oguche Agudah, chief government officer of PenOp, stated pension fund managers keep a cautiously optimistic outlook on the Nigerian equities market.
“The latest PenOp Fund Supervisor Sentiment Survey revealed that fifty p.c of fund managers count on the market to keep up a constructive progress trajectory within the coming months.”
In keeping with him, as of mid-Might 2025, the Nigerian Change (NGX) has proven modest efficiency, with the All-Share Index (ASI) posting a year-to-date (YTD) achieve of roughly 31 p.c.
“This spectacular progress underscores the return-making potential of the Nigerian capital market, regardless of financial challenges akin to foreign money volatility, inflationary pressures, and coverage reforms.”
Oguche stated the cautious sentiment amongst fund managers displays ongoing issues round market volatility and the necessity for macroeconomic stability.
“Nonetheless, the consensus is that choose alternatives exist inside basically sturdy shares, particularly in sectors akin to banking, telecoms, and shopper items,” Oguche stated.
Analysts at FBNQuest Service provider Financial institution Analysis, reviewing the efficiency of PFAs as contained within the Nationwide Pension Fee’s (PenCom’s) report, famous that the worth of pension belongings beneath administration (AUM) held in home equities rose by N1.1 trillion in June 2025, representing a 57 p.c year-on-year (y/y) enhance to N3.1 trillion.
The native bourse, the analysts stated, delivered a powerful efficiency within the first half of 2025, posting a y/y return of 19.9 p.c. 12 months-to-date, the NGX All-Share Index has gained 39.6 p.c.
“The stable efficiency of the equities market was largely pushed by improved investor sentiment, supported by steady financial situations and spectacular company earnings.”
Trying forward, the analysts stated they anticipate an uptick in PFAs’ allocation to equities, pushed by the continued sturdy efficiency of the fairness market.
The newest knowledge from the Nationwide Pension Fee (PenCom) reveals that the overall belongings beneath administration (AUM) of the regulated business sustained its progress momentum.
In June, the overall pension business’s AUM grew by roughly 20 p.c y/y to N24.6 trillion.
“On a month-on-month (m/m) foundation, the expansion was extra modest at two p.c m/m, reflecting a gentle however slower tempo of month-to-month accumulation in pension contributions. In standardised phrases, the general pension belongings make up simply 6.8 p.c of Nigeria’s 2024 GDP.
“The low AUM-to-GDP ratio highlights the underpenetrated state of the business, underscoring the necessity to implement reforms to deepen pension protection, particularly amongst casual staff.”
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Returning to the information, FGN securities had been the first driver of the y/y progress, growing by 17 p.c y/y (N2.2 trillion) to N15.2 trillion.
When it comes to asset composition, they accounted for 61.7 p.c of the overall portfolio managed by Pension Fund Directors (PFAs), underscoring their dominant position within the business.
The excessive allocation to FGN devices, the analysts additional famous, displays their low-risk profile and relative stability, making them significantly engaging to PFAs that prioritise capital preservation and constant returns.
Funding in company debt elevated barely by three p.c y/y to N2.3 trillion.
The modest progress displays the restricted issuance of enormous company debt devices, largely as a result of elevated rate of interest surroundings, which has made debt financing much less engaging for corporates, FBNQuest Service provider Financial institution Analysis additional asserted.
