FBN Dollar Fund Review: USD Passive Income Cashcow?

FBN Dollar Fund is offering investors the opportunity to invest for passive income in dollars at minimal risk.

It is a strategically designed dollars mutual fund for those looking to make more income from their capital in dollars in Nigeria.

If you have some dollars sitting idle on your domiciliary account in Nigeria, and you want to earn an interest that is more than the paltry 0.1% interest currently being offered, then the FBN dollar might just be perfect for you.

In this review, we’ll take a deep dive into what the FBN dollar fund offers to see if it is a good investment for investors in Nigeria looking to invest their funds in dollars.

It might just be the perfect passive income Cashcow you’ve been waiting for all along.

Let’s dive in.

What Is FBN Dollar Fund All About?

The FBN Dollar Fund aka the Eurobond Fund is an investment fund that is targeted to the medium to long-term investors.

If you’re looking to invest your dollars for a minimum of 6 months at competitive rates, then the FBN Dollar Fund might just be perfect.

The Fund is a US dollar denominated mutual fund in Nigeria that invests in a broad range of dollar denominated debt instruments issued by the Nigerian federal government, state governments and other financial institutions for the medium to long-term.

So far, the FBN Dollar Fund boasts a fund size of $12.36 million, with its asset allocation distributed as follows:

  • Cash in US dollars – 4%
  • Nigerian Sovereign Eurobonds – 18%
  • Nigerian Corporate Eurobonds – 32%
  • Money Market Instruments – 46%

How to Invest With FBN Dollar Fund

To start investing with FBN Dollar Fund, you have to open an account with FBNQuest and register your interest at any FirstBank branch near you.

The minimum investment requirement is $1,000 for individual retail customers and $100,000 for corporate and institutional customers.

The minimum holding period for the fund is 180 days, so investors should be looking at holding the investment for a tenure of at least 7 months.

How Much ROI Does FBN Dollar Fund Offer?

The FBN Dollar Fund offers competitive interest rates like no other in Nigeria.

If you hold dollar funds in a domiciliary account in Nigeria, you’ll probably be lucky to get a 0.5% interest with a minimum of $10,000 operating balance.

But the FBN dollar fund seems to offer more, even though returns are not guaranteed.

So far, the fund has delivered an all-time yield of 34.4% and is projected to average a 7.4% interest per year.

It is important to note that the FBN dollar fund carries a medium to moderate risk profile, and returns are not guaranteed.

However, it has shown a history of delivering a consistent competitive return over the last 5 years.

Is FBN Dollar Fund Legit?

The FBN dollar fund looks like a legit investment opportunity.

The Fund is offered by FBNQuest, which is managed by FBN Holdings, the parent company under which FirstBank and its subsidiaries belong.

The Fund however carries some form of risk even though minimal, as most mutual funds would.

So, the FBN Dollar Fund is obviously legit but returns are not guaranteed.

What I Like About FBN Dollar Fund

The most catchy thing about this fund is the medium tenure and reasonable returns.

With a minimum investment tenure of just 6 months, it could be termed as slightly liquid.

And the fact that I could get more interest than is currently being offered by domiciliary accounts in Nigeria, that’s definitely a plus.

What I Dislike About FBN Dollar Fund

Honestly, this fund is just like any other mutual fund you can get out there.

I don’t see any negatives concerning the FBN dollar fund as at the time of writing this review.

But critically looking at it, I’m thinking about what could go wrong.

Well, the only downside is the non-assured return which I’m fine with, as is obtainable with any mutual fund or zero assured return product.

In the worse case, returns would hover above the 0.1% obtainable with a dollar domiciliary account in Nigeria.

Can You Lose Money With FBN Dollar Fund?

Unfortunately, you can.

These kinds of funds carry some form of risk. Assets could lose value due to changes in market conditions.

But investors are trusting in the historical performance of this fund, which has been positive so far.

Imagine a 34.4% return from inception till date. That is noteworthy.

Also, looking at the asset allocation, the fund is well diversified and structured to minimize risk with 50% invested in Nigerian corporate and government eurobonds.

Should You Invest in FBN Dollar Fund?

It’s a no-brainer.

For a fund that has been consistent for more than 5 years, with a low minimum tenure and a reasonable return in dollars.

Not to talk of the minimal risk profile.

Honestly, I’d rather invest my USD funds with FBN dollar fund than let it collect dust in a domiciliary account.




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