Money market funds (MMFs) have long been a favoured investment vehicle for individuals and institutions looking to invest in assets characterised by high yield, low risk, and high liquidity. As of 1H24, the total value of MMF assets under management (AUM) globally had increased to $10.6 trillion.
In Nigeria, these funds have become increasingly popular due to their advantages over other asset classes such as savings accounts, equities and bonds. This post explores the concept of MMFs and highlights the top six MMFs in Nigeria that offer the best yield in 2025.
Money Market Funds Explained
A money market fund is a type of mutual fund that invests in short-term (usually 365 days and below), low-risk, high yield and liquid financial instruments such as Treasury bills, certificates of deposit, commercial papers, repurchase agreements, and others. The primary goal of an MMF is to offer investors a safe and easily accessible place to invest their money while generating returns.
MMFs operate by pooling funds from multiple investors to invest in these short-term instruments. The returns generated from these investments are typically paid out as interest to the fund’s investors based on the number of units they hold.
Features of Money Market Funds
- Safety: MMFs invest in low-risk securities such as government-issued Treasury bills or highly-rated commercial papers, making them relatively safe.
- Liquidity: Investors can access their funds quickly, often with little or no penalties, making MMFs ideal for short-term investments.
- Lower returns than stocks, but higher returns than savings accounts: While their returns may not be as high as riskier investments like stocks, MMFs generally offer better returns than traditional savings and fixed deposit accounts.
- Diversification: By pooling resources from many investors, MMFs enable small investors to benefit from diversified holdings in various short-term securities.
6 Best Money Market Funds in Nigeria With Most Returns to Consider in 2025
The money market funds market in Nigeria is huge and growing. It is the mutual funds industry’s most popular naira-denominated AUM and marginally leads the entire industry with a market share of 45.61% as of January 17 2025, according to Nigeria’s Securities and Exchange Commission (SEC).
The interest rate on MMFs is often tied to the prevailing short-term interest rates in the economy, such as the monetary policy rate and Treasury bill rate of the Central Bank of Nigeria (CBN). Analysts say that the major growth driver in Nigeria’s MMF arena is the CBN’s monetary policy rate increases which have triggered high yields in money market instruments. High yields tend to attract more savers to MMFs.
Other data from the SEC indicates that the following are the top six money market funds with the best yields (year to date) as of January 17 2025:
1. EDC Money Market Fund Class B
Fund Manager: EDC Fund Management Limited
Net asset value: ₦1,966,736,563.32
Unit price: ₦1,000,000
Minimum investment amount: ₦5,000
Yield (YTD): 25.64%
To invest in EDC Class B MMF:
- Visit the Ecobank asset management page.
- On the page, click on “Open An Account Today” and follow the instructions.
2. Meristem Money Market Fund
Fund Manager: Meristem Wealth Management Limited
Net asset value: ₦19,506,484,310.39
Unit price: ₦10
Minimum investment amount: ₦10,000.
Yield (YTD): 24.11%
To invest in Meristem MMF:
- Visit Meristem’s wealthbuddy.ng page and click on “Get Started”.
- Sign up and follow the instructions on the site
3. Coronation Money Market Fund
Fund Manager: Coronation Asset Management Limited
Net asset value: ₦11,013,314,857.38
Unit price: ₦1
Minimum investment amount: ₦10,000.
Yield (YTD): 23.88%
To invest in Coronation MMF:
- Visit the Coronation money market fund product page.
- Click on “Contact Us” and a money market fund quotation form will appear.
- Enter the required information and then click on “Request Quote”.
4. Chapel Hill Denham Money Market Fund
Fund manager: Chapel Hill Denham Mgt. Limited
Net asset value: ₦13,892,111,482.0
Unit price: ₦100
Minimum investment amount: ₦5000
Yield (YTD): 23.55%
To invest in Chapel Hill Denham MMF:
- Download the InvestNaija App from the Apple App Store or Google Play Store.
- Sign up by creating an account.
- Complete your KYC process for a secure and verified profile.
- Go to the “InvestIN” section.
- From the “Mutual Funds” option, choose “Money Market Funds”.
5. EDC Money Market Fund Class A
Fund Manager: EDC Fund Management Limited
Net asset value: ₦32,264,293,650.92
Unit price: ₦1,000,000
Minimum investment amount: ₦5,000
Yield (YTD): 23.20%
To invest in EDC Class A MMF:
- Visit the Ecobank asset management page.
- On the page, click on “Open An Account Today” and follow the instructions.
6. Zedcrest Money Market Fund
Fund Manager: Zedcrest Investment Management Limited
Net asset value: ₦3,230,836,112.53
Unit price: ₦1
Minimum investment amount: ₦1000.
Yield (YTD): 23.16%
To invest in Zedcrest MMF:
- Download the Zedcrest Wealth app.
- Create your account.
- Push the “Invest” button.
- Tap “Mutual Funds”.
- Choose your preferred option based on your risk profile.
Conclusion
MMFs are a big component of Nigeria’s thriving mutual funds industry. Nigerians love them because of their attractive features such as low risk and higher yields when compared to options like savings accounts. A ₦1 million investment into an MMF with a 19% annual yield will earn you ₦190,000. Compare that with a savings account offering a 9% yield (₦90,000) for the same ₦1 million.
However, before investing in MMFs, conduct serious due diligence to ensure that their risks are acceptable to you. For example, it has been reported that the NDIC does not insure MMFs. So unlike savings accounts, you run the risk of not getting government assistance if your money is trapped in a failed MMF company.
NOTE: This is not financial advice. Please consult your financial advisor before making any financial investment decisions. Nairabrains will not liable/responsible for the information contained in this article or your use of same.
1 Comment
Plenty thanks