AIICO Capital says its AIICO Eurobond Fund (AEF) delivered a return on investment of 12.57 percent in 2025, underscoring strong portfolio performance as the fund prepares for a major change in how its assets are valued from next year.
In a notice to investors, the firm said the fund’s Net Asset Value (NAV) also grew by 203 percent during the year, reflecting disciplined portfolio management and favourable conditions in global fixed income markets.
The performance update comes ahead of a planned transition in January 2026 from amortised cost valuation to fair value, or mark-to-market, valuation for the fund’s underlying investments.
Performance First, Then Process Change
AIICO Capital framed the valuation shift as a regulatory and accounting adjustment rather than a response to portfolio weakness.
The firm said the fund’s strong 2025 return demonstrates that the underlying investment strategy and asset quality remain intact.
The change, it explained, is being implemented in line with directives from the Securities and Exchange Commission and is intended to align the fund with global standards on transparency and investor protection.
What Mark-to-Market Means for Returns
From January 2026, the Eurobond Fund’s assets will be priced based on prevailing market values rather than held at amortised cost.
While this does not alter the fund’s investment objective or portfolio composition, it means reported NAV and daily yields will be more sensitive to movements in global bond prices, interest rates, and market sentiment.
AIICO Capital cautioned that short-term volatility in reported returns may increase under the new methodology.
However, it stressed that medium- to long-term performance will continue to be driven by income generation, portfolio strength, and active management.
Core Strategy Remains Intact
The firm reassured investors that the Eurobond Fund will remain focused on high-quality, US dollar-denominated Eurobonds.
Investor units, ownership structure, governance arrangements, and the investment management team are unchanged.
According to AIICO Capital, the valuation transition is designed to give investors a clearer, more market-reflective view of fund value, even if it introduces wider day-to-day fluctuations.
As Nigeria’s asset management industry deepens, the move highlights a broader regulatory push to align local funds with international reporting and valuation practices—while the fund’s 12.57 percent return provides a performance cushion as that transition begins.
