When investments are properly considered and carried out, there is always a huge possibility of recording profit. The pension sector is a typical example.
This is why the total Pension Assets of the Pensions Commission rose to ₦3.13 trillion in just 12 months.
Based on data, the pension sector has recorded a huge return on investment within the last 12 months.
In 2023, the pension sector had some money lying idle and it decided to invest it.
It injected ₦588.1 billion into the stock market in that year and now, the sector is one of the strongest financially.
Stocks of the Pension Fund Operators Association of Nigeria (PenOp) grew by 8.52% in the equities market at the end of Q1 of 2023
The domestic investors traded equities worth ₦3.167 trillion, with retail investors accounting for over 35% (₦1.12 trillion).
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Also, the trading stocks of institutional investors were valued at ₦2.05 trillion.
Advising Pension Fund Administrators (PFAs), to take advantage of the opportunities in the equity market, the Pension Commission (PenCom) said: “The equity market provides opportunities for PFAs to take strategic positions in sound but undervalued stocks for long-term benefit”.
This is as PenCom’s total pension asset rose to ₦18.4 trillion in December 2023 from ₦15.27 trillion in January.
Monthly Data Shows ₦74bn Growth
PenCom’s monthly data on pension funds industry portfolio reveals that stock investment grew from ₦983.09 billion in January to ₦1.57 trillion by December 2023
Market analysts say, this shows the increasing appetite of PFAs to invest in the stock market, which has rallied considerably since last year.
“From the commencement of the year until October 2023, ordinary shares witnessed a noteworthy increase of ₦588 billion, underscoring their robust performance, according to PenOp.
Simultaneously, Federal Government bonds exhibited substantial growth, marking an uptick of 1.94 trillion.
According to PenOp, 2023 was a good year for pension fund investments, represented by some of the asset classes in pension fund portfolios.
The association said there was a slight reduction of ₦19 billion in investments in the money market as of October.
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It said: “This suggests a strategic reallocation of the fund assets to other classes.
“Notably, investments in infrastructure experienced a positive surge, showing an increase of ₦17 billion during this period.
“These shifts in asset values signify a responsive and diversified investment strategy, optimising the portfolio to capitalise on varying market conditions and opportunities”.
