OVERVIEW
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.
INVESTMENT OBJECTIVE
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 the safety of the principal.
FUND PERFORMANCE
The AIICO Money Market Fund returned a net yield of 19.12%, compared to the benchmark rate of 16.50% set by the 91-day NTB paper. The fund’s return was attributed to prudent investments in high-yielding fixed deposits and short-term securities, such as commercial papers and Treasury bills, resulting in a weighted average tenor of approximately 91.63Days.
In May, The financial system faced a liquidity shortage for the significant part of May. While inflows from federal allocations and FX Swap maturities helped increase money in the financial system, OMO auctions (₦1.92 trillion), NTB auctions (₦913.64 billion), and FGN local bond auctions (₦682.07 billion) significantly impacted liquidity. Overall, the average opening system liquidity increased from -₦490.48 billion in April to -₦227.77 billion in May. The average Open Repo Rate (OPR) increased by 138 basis points m/m to 29.61%, while the Overnight Rate (OVN) expanded by 118 basis points m/m to 30.38%.
The treasury bills market started bullish in the first half of the month, with a slight decrease in stop rates at the primary market auctions. However, the market’s sentiment turned negative after the CBN increased the monetary policy rate by 150 basis points to 26.25% and issued multiple OMO bills. Overall, the treasury bills market closed on a bearish note in May. The average mid-rate rose by 126 basis points m/m, settling at 20.52%.
