Nigeria’s pension industry recorded a moderation in asset growth in March 2026, reflecting shifting market conditions and strategic portfolio rebalancing by fund managers.
- +Pension assets growth slows on market shift
After a strong expansion in February, when pension assets grew by N1.38 trillion, the slower pace in March, standing at N91.4 billion, highlights the impact of valuation changes across key asset classes, according to investment officers and fund managers.
After a strong expansion in February, when pension assets grew by N1.38 trillion, the slower pace in March, standing at N91.4 billion, highlights the impact of valuation changes across key asset classes, according to investment officers and fund managers. It also reflects cautious positioning by pension fund administrators (PFAs) seeking to manage risk and preserve long-term returns in a volatile environment.
Oguche Agudah, managing partner at HRISP Partners Limited, said the decline between February and March was largely due to a slowdown in the Nigerian Exchange Limited (NGX) market rally. He noted that although the NGX All-Share Index continues to rise, growth has been tempered by macroeconomic and geopolitical uncertainties, particularly as the effects of US–Israel–Iran tensions begin to weigh on global and domestic markets.
“It is important to note that the over N1 trillion increase in assets invested in ordinary shares in February was an extraordinary, outlier performance. Nonetheless, pension assets remain on a steady growth path, and the industry is still on course to achieve over 20 percent growth in assets under management in 2026,” he said.
Data from the National Pension Commission (PenCom) show that pension fund assets rose to N29.52 trillion at the end of March 2026, an increase of N91.4 billion month-on-month from N29.43 trillion in February, representing a modest growth of about 0.31 percent.
The data also reveals selective pressure points. Fund II posted a contraction of N26.1 billion, while Fund III declined by N72.9 billion, suggesting portfolio valuation losses or tactical reallocation during the period.
“The sharp slowdown in March growth to N91.4 billion, compared with over N1 trillion in February, is not a sign of structural weakness but rather the result of market dynamics and portfolio adjustments that reversed some of the valuation gains seen earlier,” said Chika Onwunali, partner at Premium Debate.
According to Onwunali, February’s growth was an outlier driven largely by mark-to-market valuation gains from rising bond prices (as yields softened), equity market rallies, and revaluation gains across major portfolios such as Fund II and Fund III. “Such gains are typically non-linear and difficult to sustain monthly, so March reflects a natural normalisation phase,” he said.
Wale Okunrinboye, chief investment officer (CIO) at Access ARM Pensions, said pension assets grew modestly by 0.31 percent month-on-month to N29.52 trillion in March 2026, a significant deceleration from February’s 4.96 percent expansion.
“The slowdown was driven by weak performance across RSA Fund II (-0.6 percent) and CPFA assets (-0.9 percent), with the former likely reflecting the impact of a sell-off in FGN bonds in response to expectations of higher government borrowings,” he said.
He added that the contraction in the CPFA segment reflects the impact of naira appreciation during the month, which compressed the naira value of its US dollar-denominated assets. “Excluding these two portfolios, the rest of the fund range posted continued positive growth, indicating that the softness in March was largely isolated to specific asset classes and currency dynamics,” he said.
Onwunali further explained that the immediate drag came from negative movements in major RSA funds—Fund II (-N26.1 billion) and Fund III (-N72.9 billion)—which are growth-oriented and have higher exposure to equities and variable income instruments.
Given that over N17 trillion is invested in FGN securities, even small shifts in yields can significantly impact valuations. A rise in yields in March would have led to a decline in bond prices and mark-to-market losses, especially in available-for-sale portfolios. This contrasts with February, when bond market conditions were more favourable.
Market analysts also pointed to portfolio rebalancing and profit-taking following February’s strong performance. PFAs likely locked in gains on equities and bonds while reallocating into safer or short-term instruments. This is reflected in the sustained high allocation to money market instruments (N2.55 trillion), indicating a shift toward liquidity and caution.
Unlike February, when market performance significantly boosted asset growth, March’s increase appears to have been driven more by net contributions (cash inflows), which are typically steady but not large enough to generate trillion-naira jumps within a single month, the analysts noted.
