Local Currency Funds Jump 140% as Investors Pull Back from Dollar Assets

Written by Daniel February 5,2026
Naira-denominated mutual funds recorded a massive surge of about 140 per cent within a year, as investors increasingly shifted focus away from dollar-based assets, signalling renewed confidence in local currency investments.
Data shows that dollar-denominated mutual funds posted modest growth, rising by 12 per cent from N1.708 trillion in 2024 to N1.92 trillion by November 2025. In sharp contrast, naira-based mutual funds expanded significantly, climbing from N2.289 trillion to N5.48 trillion over the same period.
The development was captured in KPMG’s 2025 Banking Industry Customer Experience Survey Report titled “Competing for the Customer – Beyond the Basics in an AI-Shaped Financial Landscape.”
According to the report, the portfolio shift reflects a recalibration of risk and renewed trust in naira assets, driven by relative currency stability and improving macroeconomic indicators. Nigeria’s economy recorded growth rates of 3.13 per cent in the first quarter and 4.23 per cent in the second quarter, helping to influence investor sentiment.
Household savings behaviour also showed marked improvement. Only 8 per cent of respondents reported not saving any portion of their income, down from 18 per cent in the previous year. Meanwhile, 50 per cent of respondents now save between 5 per cent and 20 per cent of their monthly earnings, pointing to a gradual return to financial discipline despite ongoing cost-of-living pressures.
The report further highlighted generational trends that present opportunities for financial institutions. Gen Z consumers are increasingly savings-conscious, with 68 per cent setting aside at least 5 per cent of their income, reflecting growing financial awareness and a preference for digital-friendly savings tools. Millennials showed steady habits, with 25 per cent saving between 11 per cent and 20 per cent, while 19 per cent saved between 21 per cent and 40 per cent of income. Generation X remained focused on long-term security, with 21 per cent saving between 21 per cent and 40 per cent of their earnings.