Why Money Market Funds Remain Attractive Despite Declining Rates

Despite declining inflation rates, analysts still recommend Money Market Funds as a strong investment option. Currently, the average yield for Money Market Funds stands at 20.36%.

Money Market Funds pool investors’ money into short-term, high-quality debt instruments like Treasury Bills, Commercial Papers, and Certificates of Deposit. Returns depend on market conditions and are typically paid quarterly.

With inflation dropping to 24.48% in January and a further decline expected, money market yields have also fallen. One-year Treasury Bill yields have dropped from a 30.77% peak in November 2024 to 22.52% in the latest auction. However, analysts note that many Money Market Funds still provide positive real returns, with some offering over 20%.

MoneyAfrica suggests using Money Market Funds for emergency savings instead of traditional bank accounts due to their liquidity and returns. Some funds require as little as ₦5,000 to invest.

The Money Market Fund has a net asset value of ₦2.21 trillion, making it the largest mutual fund (49.5%), surpassing dollar funds for the first time in January 2025. It has grown 140% in the past year, with Stanbic IBTC managing half of the total market value at ₦1.04 trillion.

Top-Performing Money Market Funds (as of March 7, SEC report):

Zedcrest Money Market Fund – 24.69% return, ₦4.2bn NAV, min. investment ₦1,000
Anchoria Money Market Fund – 23.95% return, min. ₦5,000
Chapel Hill Denham MMF – 23.36% return, ₦15.92bn NAV, min. ₦5,000
Norrenberger Money Market Fund – 23.21% return, ₦15.82bn NAV
Meristem Money Market Fund – 22.97% return, min. ₦10,000
ARM Money Market Fund – 22.80% return, ₦15.3bn NAV
Coral Money Market Fund – 22.61% return, ₦46.2bn NAV
Cordros Money Market Fund – 22.45% return, ₦19.05bn NAV, min. ₦10,000
FBN Money Market Fund – 22.37% return, ₦420.17bn NAV, min. ₦5,000
STL Africa Money Market Fund – 22.26% return, ₦2.12bn NAV
EDC Money Market Fund Class A – 22.22% return, ₦4.2bn NAV, min. ₦5,000