Yes. The arm.com.ng can compound your investment over time, but it does so through growth in the fund’s Net Asset Value (NAV) and the reinvestment of earnings, rather than through a fixed interest rate like a savings account.
A strong indication is that ARM’s factsheet reports performance using an assumption of reinvested dividends. In other words, dividends generated by the underlying stocks are assumed to remain invested in the fund, allowing future returns to be earned on past gains—a form of compounding.
For example:
If you invest ₦100,000 and the fund gains 20%, your value becomes ₦120,000.
If the following year it gains another 20%, the gain is on ₦120,000, not the original ₦100,000.
Your value becomes ₦144,000, which is the effect of compounding.
Keep in mind:
Returns are not guaranteed because the fund invests mainly in Nigerian equities (stocks).
Some years may have very high returns, while others may have low or negative returns.
Compounding works best when you stay invested for many years and continue adding money regularly.
If you tell me:
Your monthly contribution (e.g., ₦10,000, ₦20,000, ₦50,000), and
How many years you plan to invest,
I can estimate how much your investment could grow under different return scenarios.