By Chinwendu Obienyi
Collective Investment Schemes (CIS) in Nigeria experienced significant growth, increasing, with the net asset value (NAV) rising to N3.94 trillion in 2024.
According to a report titled; Nigeria’s Capital Market (NCM) Outlook Report 2025:The Capital Market and the Quest for a $1 trillion Economy from Proshare, this indicates a 76% increase from N2.24 trillion as of December 29, 2023.
This showcases the rising investor preference for managed funds during periods of economic uncertainty.
CIS is a type of investment vehicle where multiple investors pool their money together to invest in assets such as stocks, bonds, real estate, or other securities.
The scheme is managed by a professional fund manager, who makes investment decisions on behalf of the investors.
The report attributed the rising figure to the high-risk environment and uncertainty from macroeconomic indicators which made investors seek actively managed portfolios for higher returns to cushion the negative real return.
“Thus, participation in collective investment schemes increased significantly, with the net asset value rising to N3.94 trillion as of December 20, 2024, from N2.24 trillion as of December 29, 2023”, the report stated.
It revealed that the Eurobond/dollar fund led with a net asset value of N1.699 billion, surpassing the Money Market Funds at N1.651 billion which led in 2023.
Reacting to the development, market analysts believe the rapid naira depreciation above N1,500/$1 both at the official and black market induced high subscriptions for dollar funds as investors tried to hedge the currency risk.
Interestingly, Nigeria’s Collective Investment Scheme is equally centred around traditional assets, with the top three contributors being money market funds, dollar funds, and fixed-income funds in 2023 and 2024.
Non-traditional assets such as real estate, infrastructure funds and others account for a small portion, less than 5%, in both years. Similarly, the report noted that addressing Nigeria’s huge housing deficit and fast-growing population has become the responsibility of both the private and public sectors.
It stated that funding has constrained their ability to tackle the lingering issue.
“The private sector has leveraged the capital market, issuing real estate investment funds/ trusts to raise capital for building houses structured for regular income earners.
On January 1, 2025, the Ministry of Finance Incorporated announced N1trn Real Estate Investment Fund (MREIF) to provide Nigerians with scalable long-term mortgage financing solutions.
The N150 billion Series 1 and N100 billion Series 2 funds are expected to incentivise developers aiming to build affordable homes and drive real estate and construction sector activities”, the report said. Analysts believe the funding should increase housing availability but the transparency and efficiency in funds allocation will dictate the impacts on the sector.
The growth in CIS and the targeted push toward real estate investments underscore Nigeria’s evolving capital market and its critical role in addressing economic and infrastructural challenges.