The recent data from National Pension Commission (PenCom) disclosed that the nation’s fund assets declined to N19.67 trillion at the of March this year.
The figure represents a drop of N90.0 billion or 0.46 per cent compared with N19.759 trillion reported as net assets value in the preceding month.
The PenCom monthly report showed that the reduction recorded in the month of March marks an end to the consecutive monthly growth in pension assets that started in October 2022.
the overall pension assets only make up about 8.6 per cent of Nigeria’s 2023 Gross Domestic Products (GDP,) reflecting the underpenetrated level of the pension industry.
An analysis of the data revealed that investment in FGN securities continues to dominate portfolio allocation with about N12.200 trillion or 62.03 per cent of total net asset value (NAV).
Pension Funds also allocated N2.058 trillion to corporate debt securities and N1.779 trillion to money market Instruments.
Investments in ordinary shares of local companies rose by 8.72 per cent to N2.082 trillion from N1.915 trillion in February.
The data further showed that the FGN Bonds drove the month to month (m-o-m) reduction in pension assets, whose value decreased by -N284.4 billion or (-2 per cent m-o-m) to N11.5 trillion. As a result, its share of total AUM fell by -117 basis points m-o-m to 58.3 per cent. With the inclusion of treasury bills, sukuk bonds and other agency bonds, the FGN securities share of total AUM decreased slightly to around 62.0 per cent down from 62.6 per cent in the previous month.
However, corporate debt securities, whose value of pension holdings declined by -N230.9 billion m-o-m to N2.1 trillion in March, was another contributor to the m-o-m decline in the industry’s pension assets.
