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 demonstrated significant growth in December, concluding the year with an impressive net yield of 14.24%. This performance positioned the Fund as the leading money market fund in the industry, surpassing the November figure of 13.25% and outperforming the benchmark rate of 7.00% set by the 91-day NTB paper.

The fund’s success 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 50.98 days.

The financial system commenced the month with a positive liquidity position of approximately 404.09 billion. This upswing was propelled by FX OTC Settlements and delayed FAAC payments. However, liquidity took a downturn mid-month, entering negative territory due to persistent CRR debits and debits from overselling at NTB auctions. As the year concluded, this trend reversed, with positive flows from coupon and FAAC inflows.

 Overall liquidity averaged ₦201.69 billion in December, marking an improvement from ₦111.38 billion in November. Consequently, the average Open Repo Rate (OPR) and Overnight Rate (ON) moderated  to 17.25% and 17.94%, respectively, in contrast to the 19.00% and 19.91% observed in the preceding month.

Despite ample liquidity, the treasury bills market opened on a subdued note as market participants focused on the first auction of the month, which garnered significant subscriptions. Post-auction, the market witnessed increased activities, particularly at the short and long ends, notably with the new 1-year paper. Market players, seeking to fulfill unmet bids, drove demand. The market concluded the year quietly, recording an overall average mid-rate decline .

In the two auctions conducted by the DMO, approximately ₦521.83bn was offered and ₦1.05trn was sold across various tenors, sustaining the trend of overallotment at the primary market window. Stop rates on the 91-day, 181-day, and 364-day Treasury bills declined by an average of c.2.50% month-on-month, closing at 7.00%, 10.00%, and 12.24%, respectively.