Treasury bills and mutual funds in Nigeria

This page explains how to read the figures we publish on treasury bill auctions, the policy rate and fund categories. It also shows how a savings calculator works. Read the notes below before you compare any numbers.

Reading auction rates and the policy rate

An auction produces a marginal rate. That is the rate at which the last accepted bid was taken, and it sets the price for everyone who bought at that auction. Bids below it are rejected. The marginal rate is not the same as the return a buyer keeps, because bills are sold at a discount and repaid at face value. The gap between the price paid and the face value, spread over the time to maturity, gives a true yield that is higher than the quoted marginal rate.

The policy rate is the rate the central bank sets for its dealings with banks. It does not fix bill rates, but it pulls them. When the policy rate moves, the rate the government must offer on new bills tends to move in the same direction, and existing bills keep the rate they were sold at until they mature.

Compare rates on the same basis. A marginal rate from an auction, a true yield, and a fund return are measured differently and are not interchangeable. Use the figures as a guide to the market, not as a promise of what you will receive.

Funds are a different product from a bill

A treasury bill is a debt of the government. If you hold it to maturity, the government repays the face value, so the outcome is known when you buy. A mutual fund is a pooled product. Your money buys units, and the unit price is set by the value of what the fund holds. That price can fall as well as rise, and there is no face value repaid to you.

Fund categories are described by what they hold and how they are managed. A money market fund holds short term debt and aims for steadiness. A bond fund holds longer debt and its unit price moves more when rates change. An equity fund holds shares and can swing widely. A balanced fund mixes these. Each category carries a different level of risk, and a past unit price tells you little about the next one.

This site does not publish a list of funds or managers. A list would read as a suggestion, and we do not give suggestions. Use the category descriptions to understand what a product is, then read the fund's own documents before you decide.