Fbn Money Market Fund : What You Need To Know

Fbn Money Market Fund: What You Need To Know

What are mutual funds?

Mutual funds collect money from various investors and invest on their behalf. The money collected is invested in treasury bills, bonds, stocks, and fixed deposits. Normally for an individual to invest in this sort of funds he will need a vast knowledge of financial mechanics and experience coupled with huge sums of money. But through mutual funds, private individuals can now invest by pooling their resources together and hiring a financial institution with the vast financial knowledge to help undertake their investments. The financial institution will be responsible for market research, documents processing, and investment plans while individuals will be responsible for providing the capital. The bank charges a small commission for their services. Mutual funds are ideal for investors that have very little knowledge about investments and have limited time for researching the market.

First Bank Fbn Money Market Fund: Detailed Info

The First Bank Money Market Mutual Fund is one of the Mutual funds plans put in place by the bank (it has other Mutual Fund plans like The FBN Fixed Income, The FBN Heritage Fund, The FBN Nigeria Eurobond (USD) and The FBN Nigeria Smart Beta Equity Fund for individuals wishing to venture into the world of investment but have little knowledge about investments or have limited time for research.

How The FBN Money Market Fund Works

The First Bank Money Market Fund’s major aims are to maximize current income, preserve your capital and maintain a high degree of liquidity of your assets. The focus of the money market funds is, therefore, to invest in a low-risk, wide range of short-term to medium term, money markets securities for maximized returns.

The First Bank Money Market Fund is rated Aa(f) by Agusto & Co because it has minimal to low risk of investment loss due to low net asset value volatility! This means that the bank invests your fund where it matters most, such as treasury bills, guaranteed commercial papers, banker’s acceptance, and bank tenured deposits to give you maximized returns.
This money market plan is for almost everyone as it has low costs and higher returns than the normal savings account. In this post, we will tell you all you need to know about the money market.

Duration: the first bank money market is an investment plan for investors with short-term to medium terms goals. It provides the unitholders stability, liquidity and like all other plans, it provides some income.

Better than savings account: the first bank money market offers higher rates when compared to the normal bank savings account. It offers a whopping amount of 17.6% average of your investments while the standard savings account offers just 2% of your savings every year. This yield is currently one of the highest offers in the country second only to Stanbic IBTC.

Below is a one-year fund performance to give you an idea of how the FBN Money Market Fund

  • 31 Dec 2014 100.00 11.87%
  • 31 Jan 2015 100.00 12.37%
  • 28 Feb 2015 100.00 12.50%
  • 31 Mar 2015 100.00 13.53%
  • 30 Apr 2015 100.00 14.44%
  • 31 May 2015 100.00 13.81%
  • 30 Jun 2015 100.00 13.63%
  • 31 Jul 2015 100.00 14.40%
  • 31 Aug 2015 100.00 13.53%
  • 30 Sep 2015 100.00 13.79%
  • 31 Oct 2015 100.00 12.34%
  • 30 Nov 2015 100.00 10.66%
  • 31 Dec 2015 100.00 8.61%

Low Risk: The first bank money market fund is a low-risk investment as it pools small amounts from various investors and invests on sure profits project and as such your money and profits are always guaranteed. Note that no matter what happens your initial capital is always safe, so you can invest without fear.

Your money always grows in fbn money market fund: keeping your money in the bank deposit account makes your money value fixed and subjects to lose of value via inflation. In the money market, your money is guaranteed to always grow both in face value and purchasing power.

Low Investment Capital: the first bank money market fund despite it higher returns and lower risk has very low capital costs. With a minimum of #5000 investment, it makes the funds open to all. You can easily set aside #5000 in a month or even a week and start investing immediately.

Minimum Holding Period: the minimum holding period for the FBN Money Market is 30 days. Income is calculated on a daily basis so you may decide to receive your payments every 3 months or as you may wish.

Tax: It’s refreshing to know that the money market has no withholding tax payable on capital gains. As your capital grows you will pay no tax at all.

A little Mathematics:

The FBN Money Market Mutual Fund offers a very good return on investment considering that it is a very low-risk financial instrument. If you invest #25,000 in The Money Market for 18months on the average you will end up with #29,000. The #4,000 interest might look small, but think of it in percentage terms; that’s a 16% yield! The Money Market investment is mainly for persons with a large initial capital or institutional investors with large pools of funds. Let’s increase the number a little. Let’s assume you invested #25 million, then #4 million return in 12 months won’t look so insignificant anymore.

You can do business with the money if you want, but with the high potential profits from investing in a business, also comes the risk of losing you’re your initial investment. You can either invest in First Bank Money Market Fund or start a business depending on your risk aversion and financial strategy (aggressive growth, growth, capital preservation etc).

Having looked at the above, one may easily conclude that the Mutual Fund is the best way to save money, especially when saving for a long term project as the safety of your initial capital is guaranteed and your money is sure to give returns with time. And what’s more? Its returns are higher than the standard savings account. So next time when saving for a long term project, don’t just dump your money into the normal savings account where it makes very little to nothing returns but invest it on the first Bank Money Market Fund where higher returns are guaranteed!

We would like to hear your thoughts about the Mutual Fund via the comment section. – fbnquest.com/asset-management/products/mutual-funds/


Tags: First Bank FBN Money Market Fund

7 Replies to “Fbn Money Market Fund : What You Need To Know

  1. Can i reinvest my profit on the money market fund to form a bigger capital? 2.if I don’t invest another more money let’s say I invest #20000 this Month and I don’t put in another #20000 next Month, does my initial #20000 keep yielding increase or after yielding its first increase it stops? Pls, give info on this, thank you.

  2. Nice to know this, but the interest u’re talking about is it monthly, quarterly or yearly? (2) can someone invest up to a million and leave there for as long as he/she wants? Please clearify this.

    1. Yes, you can leave is there till the next 100year and beyond, your interest will be added incrementally on a daily basis, and if you can keep it long enough, and not touch your interest, you will benefit from the power of compound interest, that’s where the magic is… you can read more about Compound Interat.

  3. Does Zenith bank offers Money Market services as well?
    And again, do one need to have an account with the bank before being eligible to access the money market offer… Your response is appreciated..

  4. Can I start the investment even if I don’t have an account with first bank?
    And can open the account in any first bank branch? Because I leave in Kaduna

    1. You dont need to have account with first bank as this fund is managed by FBNQuest Merchant Bank Ltd. The investment banking arm of FBN Holdings. Visit their website on www. fbnquest.com/asset-management/products/mutual-funds/ for more info.

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