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 delivered a YTD return of 6.31% in May 2026, outperforming its benchmark of 3.19%.
Global yields extended their broad-based climb into May, as persistent inflation concerns kept Sub-Saharan African Eurobond markets under pressure through the early part of the month. That pressure eased towards month-end as sentiment stabilised and investors rotated back into higher-quality credits.
With the timeline for monetary easing remaining uncertain as energy costs stemming from the Iran-U.S. standoff kept inflation elevated. This geopolitical tension continued to be the central swing factor behind global inflation expectations during the month.
Nigeria’s gross external reserves increased from $48.36 billion at the end of April to $49.58 billion as at 29 May 2026, a M-o-M increase of c.2.50%. The build-up was supported by sustained oil revenue inflows and continued FX market normalisation under the CBN’s reform framework. Brent crude traded at approximately $93.03/bbl during the month, significantly above the Federal Government’s 2026 budget benchmark of $64.85/bbl. This strengthened reserve accumulation and supported FX stability, underpinning Nigeria’s relative Eurobond outperformance within the SSA market despite the broader global inflation backdrop.
SSA Eurobonds recorded a broadly bullish performance in May, as yields continued to moderate across most markets, supported by improving investor sentiment and sustained appetite for emerging market debt. This positive momentum builds on the partial recovery observed in April, with stronger credits leading the rally. Nigeria remained a key driver of this trend, with average Eurobond yields declining a further 8bps M-o-M to 6.78%, from 6.86% in April.
Outlook: SSA Eurobond markets are expected to trade range-bound, with investor attention remaining focused on fundamentally stronger credits, while still demanding appropriate risk premiums for more vulnerable sovereigns.
