In 2025, Nigeria’s stock market delivered a historic rally, and pension funds capitalised even more.
By October, the pension industry’s domestic equity holdings had surged to about N3.84 trillion from roughly N2.2 trillion at the start of 2025. This represents a 71 percent increase in ten months. In contrast, the NGX All-Share Index rose 51.19 percent for the year. Even the NGX Pension Index, which tracks key pension-related stocks, returned 57 percent in 2025, meaning pension portfolios outperformed these benchmarks handily.
Meanwhile, total pension assets climbed from about N22.5 trillion at end-2024 to N26.66 trillion by October 2025. Although contributions helped fuel the 18 percent asset gain, booming stock values also contributed massively.
According to industry analysts, this performance was not an accident. Over the years, Pension Fund Administrators (PFAs) have aggressively rebalanced portfolios into stocks. At the start of 2024, about 8.6 percent of pension fund assets were in Nigerian equities. By the end of 2024, the figure went up to 9.9 percent. As of October 2025, domestic equities made up 14.4 percent of pension fund assets.
Fund managers attribute this shift to a bullish market and renewed investor confidence. Essentially, they went “bargain-hunting” as stocks kept climbing.
Even conservative funds saw big gains: for example, Fund I (the default aggressive fund) jumped about 219 percent as of October 2025, with its domestic equities hitting N108 billion, from N33.9 billion at the start of 2025. Fund VI (the Shariah fund)’s domestic equities soared 515 percent, reflecting these market moves. In short, PFAs rode the bull market hard.
This broad market boom was driven by across-the-board sector gains. In 2025, nearly every corner of the market was green. The Banking and Industrial Goods indices returned 40 percent and 59 percent respectively, with the Insurance index returning 66 percent.
The Consumer Goods index also returned 49 percent during the year as stocks like Guinness Nigeria, Nigerian Breweries, BUA Foods, and others exploded higher. These sector rallies fed directly into pension portfolios, since PFAs hold large positions in major bank, insurance and industrial stocks. With dividends and share prices both rising, pension accounts saw huge paper gains.
Of course, equities still make up a minority of pension portfolios; government bonds remain in the bulk with 60 percent of pension assets being in FGN Bonds. However, with lowering bond yields in 2025, PFAs were eager to tilt toward higher-return stocks.
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The Pension Commission’s revised investment rules that were issued in September 2025 also raised the allowed equity share, further encouraging this trend. In effect, PFAs balanced their long-held safety in bonds with a strategic swoop into stocks just as Nigeria’s economy stabilised.
For ordinary Nigerians’ retirements, these moves spell big potential gains. Higher equity returns mean larger fund balances down the road. By October 2025, the entire pension scheme had about 10.97 million active accounts, up 10.58 million at the start of the year, reflecting strong coverage growth alongside these gains. In short, workers who diligently contribute to their RSAs (Retirement Savings Accounts) saw their pots grow faster than anticipated.
Looking ahead, experts say sustaining this momentum will hinge on economic stability and continued reforms. Temi Popoola, CEO of the Nigerian Exchange Group, noted that 2025’s market performance “highlights the importance of policy consistency, purposeful reforms, and strategic collaboration” to keep investor confidence high.
In other words, if government policies remain stable and further capital-market initiatives come through, pension funds could continue to ride the bull. But analysts also caution that PFAs will watch valuations closely: any sharp correction or policy misstep could erode these gains.
For now, though, Nigeria’s pension investors are celebrating a banner year, having outperformed the market itself thanks to a timely equity tilt.