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Ahead of the launch of its money market fund, BusinessDay’s David Olujinmi had a sit-down with Ugonnaya Osi, the Managing Director of DLM Asset Management, to unpack the fund’s core philosophy, what sets it apart in a crowded market, and how it aims to deliver safety, liquidity, and consistent returns for investors across the income spectrum.
From the rationale behind its open-ended structure to its focus on financial inclusion and digital onboarding, the conversation sheds light on how the Money Market Fund is redefining savings and short-term investing for a new generation of Nigerians.
Walk us through the core philosophy behind the DLM Money Market Fund.
The philosophy behind the DLM Money Market Fund is built on four key pillars: capital preservation, attractive returns, safety, and liquidity.
We recognise that investors have diverse profiles and varying risk appetites. What we’ve done is to aggregate those preferences and align them with investment objectives. The DLM Money Market Fund provides a platform for investors to earn attractive returns from low-risk instruments.
The safety and liquidity features are part of what inspired the fund. We wanted to create something as accessible and dependable as a savings account. That’s the rationale behind its creation.
To summarise, capital preservation, safety of funds, liquidity, and attractive returns.
“It’s essentially a better alternative to keeping idle funds in a savings account or tying them up in rigid fixed deposits.”
What differentiates it from other money market products in the market?
We maintain this balance through a mix of strategic pillars, primarily safety and preservation, and active management by experienced portfolio managers who understand market risk and opportunities.
As mentioned, this is a low-risk investment vehicle. Our investment strategy focuses on safe asset classes like treasury bills, commercial papers, and fixed deposits placed with investment-grade financial institutions.
In addition, we have a robust research team that works hand-in-hand with the portfolio manager to guide these decisions, ensuring the security of investors’ capital while achieving consistent returns.
Our goal is not only capital preservation but also ensuring return on investment as well as return of investment.
What specific instruments does the fund invest in?
The fund primarily invests in treasury bills, commercial papers, fixed deposits with investment-grade financial institutions, other CBN-backed instruments, and near-cash instruments.
These are all short-term investments, in line with the liquidity needs of our investors and the nature of a money market fund.
Why did you choose an open-ended structure for the fund? How does that support investor liquidity?
An open-ended structure gives investors the flexibility to enter and exit the fund at any time. For example, if I start investing today, my sibling can begin next week and still enjoy the same benefits.
This flexibility means you don’t have to wait for 60 or 90 days, unlike fixed deposits. With a money market fund, you can access your funds when you need them; it’s liquid, flexible, and built to accommodate various investment timelines.
Who is the ideal investor for this fund? What use cases does it address: emergency funds, savings, or income generation?
The DLM Money Market Fund is for everyone: retail clients, the unbanked, institutional clients, fintech users, diaspora investors, salary earners, retirees, and everyone.
It’s ideal for emergency savings, short-term investment goals, income generation, and individuals or corporates with idle or unallocated funds. Whether you’re saving towards a goal or managing excess liquidity in your business, this fund serves multiple use cases.
Can individuals invest with small amounts, for example, from personal savings or salary accounts?
Absolutely. We encourage everyone to adopt a savings and investment culture. Instead of letting funds sit idle, this fund helps your money grow. When you come back after a few weeks or months, your balance would have increased, not just remained the same as in a traditional savings account.
Do you have plans to expand beyond retail investors to institutional investors?
Yes, 100 percent. We’re already doing this through our digital platform, DLM Thrive. The platform allows onboarding, subscription, and redemption from the comfort of your home. We’re also leveraging word of mouth, social media, and partnerships with fintech companies to expand reach.
In addition to attending AGMs and corporate events, we’re working on making our product available across fintech platforms, cooperatives, and institutions.
How does one get onboarded to the fund? Is it digital, manual, or both?
We cater to both traditional and digital investors. Some prefer manual signups with physical forms, especially the older generation. For the more tech-savvy clients, we offer onboarding via DLM Thrive, our online portal.
Once onboarded, users can complete their KYC, subscribe, and redeem funds directly from the platform. It’s user-friendly and transparent. You can track daily accruals and fund growth in real time; there’s no need to call anyone for updates. You can also set up automated recurring investments.
Redemptions are processed within 24 hours, and you can redeem interest only, principal only, or both, depending on your preference.
What makes the DLM Money Market Fund more attractive than a traditional savings or fixed deposit account?
Several reasons: capital preservation, your principal remains intact, and there are no hidden maintenance charges or deductions. Attractive Returns: The fund offers daily accrual on your investment, meaning consistent growth. Liquidity: you’re not locked in. You can access your funds without penalties, unlike fixed deposits.
Diversification: we provide options for investors to explore other products within the platform as their investment appetite grows.
It’s essentially a better alternative to keeping idle funds in a savings account or tying them up in rigid fixed deposits.
How is the platform secured? What regulatory checks are in place?
Security is a top priority. We’ve conducted internal and external security audits to ensure data safety.
From a regulatory standpoint, we file weekly and quarterly returns to the SEC. This includes updates on account openings, redemptions, and compliance with investment mandates.
If we fall short on investment allocation, say, not meeting a 30 percent target in treasury bills, the SEC reaches out, and we respond with corrective steps.
In addition, the fund has a board of trustees, a custodian, a registrar, and a solicitor. All of whom work with the fund managers to ensure compliance and protect investors.
Ultimately, we are fully regulated by the SEC, ensuring transparency and accountability.
For clarity, what’s the current size of the fund?
N1.5 billion.
We’re committed to financial inclusion. Whether you have N1,000 or N100,000, this fund is for you. It’s a collective investment scheme where everyone gets their fair share of returns.
We’re bringing an inclusive, low-risk, high-transparency product to the market, one that offers what fixed deposits and savings accounts often do not: flexibility, real growth, and peace of mind.
