PFAs Pump 65% of Pension Assets in FG Securities
Pension Fund Administrators (PFAs) staked about 65.2% of Nigeria’s total pension assets in the Federal government’s borrowing instruments, a review of a report posted by the pension commission showed.
The latest data sourced from the Nigerian Pension Commission (PenCom) website reveals that the assets under management (AUM) in the Nigerian pension fund industry reached N17.35 trillion by the end of September 2023.
The figure represents an increase of more than N57 billion or a 0.33% month-on-month surge compared to the previous month’s N17.29 trillion.
The breakdown of the pension fund industry’s portfolio reveals that the largest asset class is investment in Federal Government of Nigeria (FGN) securities, such as bonds and treasury bills, constituting 65.2% of AUM as of September 30, 2023.
Corporate debt securities have witnessed a notable increase, growing from 6% to 10.70% over the past year, likely due to attractive yields and a desire to support this sector’s growth.
Other asset classes include money market instruments (9.44%) and domestic ordinary shares (7.99%). While investments in real estate and private equity have also seen growth, these asset classes remain a small portion of the overall portfolio.
Additionally, foreign ordinary shares, infrastructure funds, mutual funds, and real estate as an alternative investment class have not gained significant traction in the Nigerian market.