This recognition highlights FBNQuest Asset Management’s unwavering commitment to delivering exceptional investment solutions and fostering financial growth for its clients.

The award ceremony, celebrated the outstanding achievements of financial institutions across Nigeria, highlighting those that have demonstrated innovation, excellence, and unwavering commitment to quality service.

“We are immensely proud to receive this award, which reflects our dedication to excellence and our focus on creating value for our clients,” stated Ike Onyia, Managing Director, FBNQuest Asset Management. “This achievement is a testament to the hard work and expertise of our team, as well as the trust our clients place in us. We will continue to strive for excellence in all that we do.”

FBNQuest Asset Management offers a range of investment solutions, including mutual funds, discretionary portfolio management, and alternative investments, tailored to meet the diverse needs of its clients. The firm remains committed to maintaining the highest standards of integrity and professionalism in the asset management industry.

The BusinessDay Banks and Other Financial Institutions Awards are recognized as one of the most prestigious accolades in the financial sector, honouring organisations that excel in performance, innovation, and customer service.

The financial industry in Nigeria has experienced a significant amount of system liquidity, primarily due to sustainable high Federation Account Allocation Committee (FAAC) allocation, among other contributing factors.

It is expected that with the removal of fuel subsidy and floating of the exchange rate, the high liquidity trajectory will be sustained in the nearest future.

To navigate the current low-yield environment with high liquidity levels, investors must adopt a long-term strategy that involves purchasing long-dated investment securities. This will help you achieve better investment returns over time.

However, this surge in liquidity was temporarily disrupted by the Central Bank of Nigeria’s (CBN) significant Cash Reserve Ratio (CRR) debits to banks, resulting in a prolonged period of negative liquidity in Q1, 2023 into Q2, 2023.

Despite the removal of subsidies in late May 2023, the market has experienced increased activity due to a boost in liquidity. This is further supported by the anticipated FAAC allocations and bond coupon payments expected in Q3, 2023.

Similar to the Covid-19 pandemic, the current policy landscape offers a chance for smart, long-term investments due to the loose monetary and fiscal policies in place. Recall that yields on short-term government securities in the latter part of 2020 declined to 0%, and longer-term bond yields averaged 4%, as shown in the chart below.

Savvy investors can leverage the current liquidity surge by adopting a long strategy focused on acquiring long-dated investment solutions such as Bond Funds, Stock Funds, Target-Date funds have exposures to long-tenured instruments.

By doing so, they can secure higher coupon rates, and maximize their returns over the investment horizon.

Historical data indicates that towards the end of the COVID year when there was high system liquidity due to loose economic policies, investors who went long early in the cycle and positioned themselves at the longer end of the yield curve benefited greatly.

A case in point was the FBN Bond Fund which returned 18.37% by 2020FY, higher than the inflation figure in that year (13.25%).

Drawing from this experience, investors can make prudent decisions and prioritize longer-term investments (1-3 years) to preserve and grow capital amidst the current liquidity abundance.

Embracing a long-term investment strategy can help investors navigate the current economic landscape and capitalize on the opportunities presented by the increase in statutory allocations due to subsidy savings.