Mutual funds remain one of the simplest ways for investors to gain diversified exposure to financial markets while benefiting from professional management.
Instead of selecting individual stocks or bonds, investors pool their money together, and fund managers invest across assets such as equities, treasury bills, bonds, or real estate.
This structure makes diversification accessible to both small and large investors. If one asset performs poorly, gains in others can help cushion losses, reducing overall risk.
However, not all mutual funds perform the same.
It is important to note that the fund selections and insights in this article are based on historical performance as of 2025, using available data from the SEC CIS Valuation Report as of November 28, 2025.
Additionally, investors should note that past performance is not a guarantee of future returns, and market conditions in 2026 may evolve differently.
As part of Nairametrics’ investment coverage, these mutual fund categories and manager performance are reviewed quarterly, based on updated returns and market conditions.
Investors are encouraged to check back regularly for revised rankings and fresh insights as 2026 unfolds.
Now, let us look at mutual funds
According to the SEC CIS Valuation Report as of November 28, 2025, the average return across 14 mutual funds was 25.75%.
While respectable, this was significantly lower than the return from directly investing in equities through the NGX All-Share Index, which returned 51%.
The data shows that only a few mutual fund categories truly matched the equity market rally.
Equity-based funds returned an average of 50.56%, closely tracking the broader market.
Other categories, such as money market funds, fixed income funds, REITs, infrastructure funds, and dollar funds, delivered returns mostly between 9% and 18%, making them better suited for income and stability rather than aggressive growth.
It is also important to note that within each category, some fund managers significantly outperformed their peers.
Strong stock selection, disciplined strategy, and effective risk management allowed certain funds to deliver above-average results.
That said, returns alone should not drive investment decisions. Consistency, risk controls, fund size, liquidity, and the experience of the fund manager are equally important.
This brings us to the key question for investors heading into 2026: which mutual funds and which fund managers stand out as the best options going forward?
Equity-Based Mutual Fund
Equity-based mutual funds are the top-performing mutual fund category heading into 2026, with an average return of 50.56% as of November 2025, closely tracking the Nigerian stock market’s 51.19% gain.
This makes them the most suitable option for investors seeking high, inflation-beating returns.
These funds invest primarily in listed equities and offer the advantage of professional management and diversification.
Instead of picking individual stocks, investors gain exposure to a basket of quality companies, reducing stock-specific risk while still benefiting from market upside.
While equity funds can be volatile, they remain the strongest option for growth-focused investors.
Why equity funds still make sense in 2026
The market enters 2026 with strong momentum after a historic 2025 rally
Several sectors, especially banking, still trade at attractive valuations
Dividend-paying stocks remain compelling as yields compete with fixed income
Active fund managers can rotate between sectors as leadership changes
Our top picks for 2026
Stanbic IBTC Nigerian Equity Fund – Delivered about 62% in 2025, offering size, diversification, and disciplined management.
Zrosk Magna Equity Fund – Returned roughly 64%, driven by high-conviction stock selection and active sector rotation.
Guaranty Trust Equity Income Fund – Stood out with 80% return, blending capital growth with steady dividend income.
These funds provide a strong foundation for investors targeting growth in 2026.
Balanced Mutual Funds
Balanced mutual funds are ideal for investors who want steady growth with lower volatility. By combining equities and fixed income, these funds smooth out market swings while still delivering inflation-beating returns.
In 2025, balanced funds returned an average of about 31%, supported by a combined net asset value (NAV) of over N80 billion.
Why does it make sense in 2026
Smooths volatility after the strong 2025 equity rally.
With inflation and MPR expected to fall, balanced funds can increase equity exposure without losing income stability.
Protect against timing risk of when to enter or exit equities, as professional managers adjust asset allocation as conditions change.
While many funds performed well, a few clearly stood out for their mix of scale, performance, and consistency.
Our top Balanced Fund picks for 2026
Balanced Strategy Fund (Zenith Asset Management) – Delivered about 55% in 2025, standing out for strong equity positioning combined with disciplined risk management.
Stanbic IBTC Balanced Fund – Returned roughly 49%, benefiting from a well-diversified mix of equities and fixed income, backed by scale and size.
Alpha Morgan Balanced Fund – Posted about 42%, driven by active asset allocation and flexibility to adjust quickly to changing market conditions.
Money market mutual funds
Money market funds are the largest and most stable segment of Nigeria’s mutual fund industry, with a combined net asset value of over N4.5 trillion and an average return of 18% as of November 28, 2025
Investors use them mainly for capital preservation, steady income, and easy access to cash.
Going into 2026, yields are expected to moderate slightly as inflation and the Monetary Policy Rate trend lower.
Why money market funds make sense in 2026
They provide stability and liquidity in a volatile market.
Even with rates expected to ease, money market fund yields remain attractive relative to Treasury Bills and savings bonds.
Many money market funds invest in high-quality commercial papers, which can help offset declining yields from T-bills and savings bonds as interest rates fall.
Their short-term nature reduces exposure to price losses when rates decline, unlike longer-dated bonds.
Ideal for parking funds while waiting for new opportunities.
Our top money market fund picks for 2026
Stanbic IBTC Money Market Fund – Delivered about 17% and dominates the market with a NAV of roughly N2.23 trillion. Its strength lies in scale, liquidity, making it ideal for capital preservation and portfolio stability.
ARM Money Market Fund – Returned around 18.1%, supported by a large NAV of about N307 billion. It balances safety with smart yield optimization, offering slightly higher returns without compromising quality.
AIICO Money Market Fund – Posted roughly 18.4%, smaller in size but more aggressive on yield. It stands out for active income optimization and is suitable for investors comfortable with modest manager concentration risk.
Caution: Investors are encouraged to review each fund’s factsheet and strategy of these fund managers to ensure alignment with their liquidity needs and risk tolerance heading into 2026.
Overall
If your goal in 2026 is growth, then equity-based mutual funds should form the core of your portfolio.
These funds track the stock market closely and have shown the strongest ability to deliver inflation-beating returns, especially in years like 2025 when the NGX posted exceptional gains.
If you want balance, meaning steady growth with lower volatility, balanced funds offer a middle ground by combining equities and fixed-income instruments.
They help reduce sharp swings while still allowing your money to grow.
If your priority is safety and liquidity, money market funds play that role.
They provide capital preservation, predictable income, and quick access to cash, even though their returns are lower than equity-based funds.
