OVERVIEW
AIICO Eurobond Fund is an open-ended Dollar denominated mutual fund, strategically investing in high-quality Nigeria sovereign & non-sovereign Eurobonds and in investment-grade money market instruments.
INVESTMENT OBJECTIVES
The investment objectives of the fund is to offer investors the opportunity to diversify their portfolios, ensure long term appreciation and capital preservation while generating a steady stream of income on USD denominated securities.
INVESTMENT OBJECTIVES
The AIICO Eurobond Fund closed the first quarter of 2026 with a year-to-date return of 1.79%, c.140bps above its benchmark of 0.39%.
Global debt markets recorded a severe and broad-based selloff during the month, driven by escalating geopolitical tensions, most notably the ongoing US-Iran conflict, which intensified risk-off sentiment across financial markets. Sub-Saharan Eurobonds were not spared as average yields rose sharply by c.81bps to 7.40% by month-end, reflecting tighter global liquidity conditions, upward pressure on benchmark rates, and deterioration in risk appetite across emerging market asset classes.
Nigeria’s macroeconomic position provided a degree of insulation amid broad market stress. External reserves reached a 17-year high of $50.03 billion on 11 March before moderating to $49.48 billion at month-end, a decline attributable to the CBN’s continous FX interventions.
As a net oil exporter, Nigeria benefited from the geopolitical-driven surge in crude prices, which bolstered fiscal revenues, lent support to the naira, and helped contain spread widening on Nigerian sovereign Eurobonds relative to commodity-importing peers.
Outlook: The near-term outlook for SSA Eurobond markets is moderate, supported by Nigeria’s strong reserve position and the continued tailwind from elevated crude prices. Nonetheless, we maintain a cautious stance, given the fluid geopolitical landscape. Any further escalation in US-Iran tensions or a prolonged disruption to global oil supply routes could reignite risk-off sentiment, placing renewed upward pressure on SSA sovereign spreads.
