I recently wrote a review on GTCO Mutual Funds where I mentioned their Money Market Fund.
However, due to popular demand, I’ve decide to publish my take on their money market fund, which I personally view as a very interesting opportunity.
The GTCO Money Market Fund is promising reasonable returns for short-term investors looking to keep their money in a safe yielding portfolio.
But what can investors expect when they put money into this fund?
A yield above the prevailing bank interest rates or a safe way to invest in paper assets?
In this review, we’ll take a look at the GTCO Money Market Fund and analyze its benefits for the Nigerian investor.
Let’s take a deep dive.
Features of the GTCO Money Market Fund
On the first look, the fund operates like a regular savings investment account that anyone could open at the bank.
But is it really a savings investment account?
There seems to be some difference.
With the GTCO Money Market Fund, the yield isn’t guaranteed like you would in a savings investment account.
The Fund however features similar monetary and tenure requirements like a savings investment account.
With a minimum investment amount of as low as 1,000 Naira and a minimum tenure of 30 days, the barrier to entry is quite low.
This gives access for almost all kinds of investors to come in, especially low-tier investors and regular savers.
How to Invest In the GTCO Money Market Fund
To start investing in the GTCO Money Market Fund, you’ll have to open a money market fund account at any of the GTCO bank branches nationwide.
The process is similar to opening a bank account.
You’ll need a personal identification, a BVN, and utility bills as proof of residential address.
Depending on the GTCO branch that you intend to use, you might also be required to open a GTCO savings or current account so as to ease movement of money in and out of your fund account.
Benefits of the GTCO Money Market Fund
The biggest advantages of this fund are the low entry point and the short tenure, which makes it a very good alternative to a savings account.
At a 1,000 Naira minimum investing amount, anyone could start investing in this fund.
It is even possible to use it as a savings investment account that goes side by side with your regular savings account.
So, you put in money which you don’t intend to use immediately, and allow it to earn interest higher than that of a regular savings account.
How Much ROI Does GTCO Money Market Fund Offer?
It is well known that money market funds do not offer a guaranteed return on investment.
So, the GTCO Money Market Fund is no different.
However, investors do rate the performance of the fund based on the historical ROI, either from inception or from year-to-date (YTD).
According to GTCO, this fund has a historical average return of 6% per annum. So, investors should expect an APR around that figure.
For the records, this fund returned a 6.17% APR in 2020 and 6.52% APR in 2021.
However, in 2022, the fund made a big jump in terms of returns, with the YTD return standing at a whopping 13%.
How Safe is the GTCO Money Market Fund
The fund is recognized as a low risk open ended fund which boasts competitive returns for investors.
According to GTCO, their money market fund is duly regulated by the Securities Exchange Commission of Nigeria (SEC).
So, this means that the fund is quite safe in terms of being regulated.
Also, the GTCO brand is well known in Nigeria as arguably the biggest bank in Nigeria in terms of active customers, so the bank is a well-trusted financial entity.
Would You Invest In The GTCO Money Market Fund?
This should be a no-brainer for savers and small investors looking to put money away on a consistent basis.
It could also serve as an “esusu” account for cooperatives and savings groups looking to save and earn above the meager interest offered in savings accounts.
Remember, all it takes is just 1,000 Naira, and you could kickstart your journey to saving and earning with a reputable money market fund in Nigeria.