Good afternoon Sir,
Trust you saw the CBN MPC decision – MPR cut from 26.5% to 23% at the 307th meeting.
Given the expected drop in money market yields and improved outlook for equities, should I consider rebalancing my portfolio by moving some funds from my MMF to Equity Funds to take advantage of the new rate?
Please advise on the best approach.
Thank you.
Yes, I saw the MPC decision. I think the MPR cut is a good reason to review the portfolio, but I wouldn't advise moving everything from the money market fund into equities immediately. For example, if you have ₦10 million in an MMF earning around 25%, that's roughly ₦2.5 million in a year if the ratRead more
Yes, I saw the MPC decision. I think the MPR cut is a good reason to review the portfolio, but I wouldn’t advise moving everything from the money market fund into equities immediately.
For example, if you have ₦10 million in an MMF earning around 25%, that’s roughly ₦2.5 million in a year if the rate remains constant. If yields eventually fall to 20%, the return could reduce to about ₦2 million.
That could make equity funds more attractive for money you don’t need in the short term. But equities also carry higher risk. If you move ₦4 million into an equity fund and it gains 15%, it becomes about ₦4.6 million. But if the market falls by 15%, it becomes about ₦3.4 million.
So rather than moving the entire ₦10 million at once, I would consider gradual rebalancing—for example, keeping ₦6 million in money-market/fixed-income investments for stability and liquidity, while gradually moving ₦4 million into a diversified equity fund for long-term growth.
I would also look at the investor’s time horizon, liquidity needs, inflation, current equity valuations and risk tolerance.
So, for me, the MPR cut is a reason to review the allocation, not necessarily a signal to move everything from MMFs into equities. The goal should be to have the right balance between capital preservation, liquidity and long-term growth.
See lessThat is a good question you know, Here is my opinion: The important thing is not to automatically move everything just because the MPR was cut. The CBN did reduce the MPR by 350 basis points, from 26.5% to 23%, at its 307th MPC meeting on September 22, 2026. Think of it like this brother, Before theRead more
That is a good question you know,
Here is my opinion:
The important thing is not to automatically move everything just because the MPR was cut.
The CBN did reduce the MPR by 350 basis points, from 26.5% to 23%, at its 307th MPC meeting on September 22, 2026.
Think of it like this brother,
Before the rate cut:
High interest rates – money-market investments can offer attractive yields – investors have less reason to take stock-market risk.
After the rate cut:
Lower interest rates – money-market/fixed-income yields may gradually decline – some investors may look toward equities for potentially higher long-term returns.
Market analysts have specifically discussed the possibility of investors rotating from fixed income toward equities following the cut.
So I wouldn’t think:
“MPR dropped → sell MMF → buy equities.”
Instead think:
MPR dropped – reassess whether my current allocation still matches my goals, time horizon and risk tolerance by doing self profiling.
Also, don’t assume every MMF yield will immediately fall. Fund yields depend on what the fund actually holds and the rates available in the market. For example, reported Nigerian MMF yields were already varying substantially across funds before this latest decision.
Let me give you a simple example so that you will understand,
Suppose you have ₦100,000.
You could conceptually have:
Option A — Conservative
₦80,000 MMF
₦20,000 equity fund
Option B — Balanced
₦60,000 MMF
₦40,000 equity fund
Option C — Growth-oriented
₦30,000 MMF
₦70,000 equity fund
The appropriate mix depends on when you’ll need the money and how much fluctuation you can tolerate, not simply on today’s MPR.
And remember: Nigerian equities have already had a very strong 2026 so far; the NGX All-Share Index was reported up about 61% year-to-date as of September 22. That means the rate cut is not happening in a market that is starting from zero
you also have to consider the prices of the investments you’re buying.
The main lesson: An MPR cut is a reason to review your portfolio, not automatically a reason to chase equities.
See lessThanks for the feedback. I am typically an option B person (balanced investor). I intend to draw down 10% from my Stanbic IBTC MMF position to top up my Chapel Hill Denham Paramount Equity Fund position for now, and then reassess after the next NTB auction / MPC reading. Thank you.
Thanks for the feedback.
I am typically an option B person (balanced investor). I intend to draw down 10% from my Stanbic IBTC MMF position to top up my Chapel Hill Denham Paramount Equity Fund position for now, and then reassess after the next NTB auction / MPC reading.
Thank you.
See lessThat sounds like a balanced approach. Moving a portion from the MMF into equities while keeping most of your funds in the MMF gives you some exposure to potential equity upside without taking on too much risk at once. Reassessing after the next NTB auction and MPC reading also makes sense, since theRead more
That sounds like a balanced approach. Moving a portion from the MMF into equities while keeping most of your funds in the MMF gives you some exposure to potential equity upside without taking on too much risk at once. Reassessing after the next NTB auction and MPC reading also makes sense, since the rate environment could influence where the better risk-adjusted opportunities are.
See less