Nigerian pension fund managers increased in investments in government fixed-income securities in November 2020 as the country continued to face uncertainties amidst the coronavirus pandemic.
Data from the National Pension Commission (PenCom) shows that Pension Fund Administrators, PFAs, invested N8.14 trillion in federal government bonds in November, N293 billion more than the amount invested the previous month.
According to the data, the PFAs invested N7.3 trillion in federal government’s bonds, treasury bills got N642 billion, agency received N6 billion, N100 billion went to Sukuk bonds, green bonds got N11 billion, while N150 billion was invested in state government securities.
Nigerian funds for most of 2020 used fixed-income securities to try to work around the negative impact of the coronavirus pandemic, which weakened the naira and pushed the equities market’s main index, All Share Index, to an eight-year low.
Although several funds later turned to equities in the hope of a rebound, they retained sizeable investments in government debt securities.
The PenCoM data show that PFAs also invested in other classes of assets. As of November 2020, they invested N780 billion in domestic ordinary shares in the Nigeria Stock Exchange and N 84 billion in foreign ordinary shares.
Corporate debt securities got N731 billion, corporate bonds received N686 billion, N16 billion went to corporate infrastructure bonds, corporate green bonds, N28 billion, and supra-national bonds N1 billion.
Also, N1.7 trillion was invested in the local money market securities where bank placements got N1.5 trillion; commercial papers, N194 billion, and foreign money market securities got N17 billion.
Other classes of assets that the PFAs invested in include mutual funds, N145 billion; open/close-end funds N59 billion; REITs, N85 billion; real estate properties N158 billion; private equity fund N31 billion; infrastructure fund, N57 billion and cash & other assets N190 billion.
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