AIICO Money Market fund is an open-ended collective investment vehicles that pools investment monies from various individuals, Corporate organizations and High Net-worth Clients (HNC) for the purpose of investing in money market securities, designed to produce short to medium term growth, income or a combination of the two.
The investment objective of the Fund is to generate regular income for unit holders by investing in high-quality, liquid, and short tenored fixed income instruments whilst ensuring safety of principal.
In July 2022, the AIICO Money Market Fund generated a net yield of 8.16% p.a, outperforming the 91-day NTB paper benchmark closing rate of 2.80%. This can be attributed to the fund’s investment in high yielding short-term securities such as Fixed deposit, Commercial papers as well as Treasury Bills. The fund closed the month with a weighted average tenor of ca 43.83 days.
Interbank System liquidity was mostly in a deficit for the month, averaging ca -₦143.17bn in July, higher than ca ₦13.71bn recorded in June, as liquidity remained shallow over the period with no significant inflow recorded. Consequently, the Open Buy Back (OBB) and Overnight (ON) rates averaged 14.32% and 14.45% in June, from 11.24% and 11.55% recorded in June.
Bearish sentiments dominated the fixed income market in the month of July, as the illiquidity in the system despite coupon inflows, forced banks and market players to offer short-dated papers and the CBN special bills to fund their obligations. Additionally, the Monetary Policy Committee (MPC) increased its benchmark interest rate to 14.00% at the July meeting in an effort to slow the pace of inflation, which further influenced selling pressure across the curve. At the recent NTB auction conducted by the Debt Management Office (DMO), the 91-day, 182-day, and 364-day papers were allocated at 2.80%, 4.10%, and 7.00% respectively.