Naija247news is an investigative news platform that tracks news on Nigerian Economy, Business, Politics, Financial and Africa and Global Economy.
Recently released report on pension fund assets by National Pension Commission (NPC) showed that the total value of pension assets rose month on month (m-o-m) by 0.41% to N12.39 trillion in April 2021 from N12.34 trillion printed in March 2021.
According to the report, most of the pension fund assets were invested in FGN Securities.
However, its share of the total assets
moderated to 67.15% (or N8.32 trillion) in the month under review, from a 68.96% (or N8.51 trillion) recorded in April 2021 as pension managers stood on the side lines to see where the rising interest rates in the money and bond markets would halt before investing more funds.
According to the report, most of the pension fund assets were invested in FGN Securities.
However, its share of the total assets moderated to 65.92% (or N8.11 trillion) in the month under review, from a 70.96% (or N7.40 trillion) recorded in 2020, as pension managers moved funds away from T-bills given the collapse of the yields, particularly in the money market, to record low single-digits amid CBN’s accomodative stance to cushion the effect of COVID-19 pandemic on the economy. As Pension Fund Administrators (PFAs) shifted focus from investment in T-bills, we saw investment preference drifting towards Local Money Market Securities (LMMS) as total funds invested in this space rose y-o-y by 39.61% to N1.65 trillion in January 2021 (lifting its share of the total assets to 13.40%), from N1.18 trillion in January 2020 (or 11.31% of total assets).
According to the report, most of the pension fund assets were invested in FGN bonds.
Hence, share of FGN bonds to total assets climbed to 57.41% (or N6.64 trillion) in the period under review, from a 54.70% (or N5.71 trillion) it printed in January 2020.
However, PFAs’ investments in T-bills declined sharply year to date (YTD) by 102.90% to N780.57 billion as at September 2020 from N1.58 trillion recorded in January 2020 as treasury bills yields plummeted to ridiculously below single-digit.
Given the reduction in the weight of FGN Securities to the total assets (it fell to 65.29% in Sept. 2020 from 70.96% in January 2020) as money flow to T- bills dropped, we saw Pension Fund Administrators (PFAs) investment preference drift towards Local Money Market Securities (LMMS) as total funds invested in this investment category rose by 70.34% to N2.01 trillion in September 2020 (lifting its share of the total assets to 17.37%), from N1.18 trillion in January 2020 (or 11.31% of total ass