“How to find Dollar investments for Nigerians” is probably something you have searched for, or something similar. No, we do not have your search queries under watch. We are Nigerians also. So, we get it; you want stable investment options that give you a chance against the devaluation of Naira. Well, your search can stop now.

Dollar Investments for Nigerians

With Cowrywise, you can now access the first of our Dollar mutual funds: the United Capital Nigerian Eurobond Fund. Eurobond? Isn’t it supposed to be a Dollar-based investment option? It still is. Let’s explain.

What are Eurobond Funds?

Eurobonds refer to a bond type that is issued in international currencies. That is, currencies different from the host country’s currency. For example, the Nigerian government can issue a bond that is denominated in dollars to allow foreign investors to access them also. Read more on African Eurobonds here.

What is a bond?

A bond is an agreement between two parties. One party borrows from the other and agrees to pay back with a set interest rate. So, a government bond is simply the government borrowing money from the public with the agreement to pay back with a certain interest rate.

What is the Nigerian Eurobond Fund?

It is a type of mutual fund that invests in Dollar-denominated Eurobonds, floated by the Federal Government of Nigeria, as well as domestic top-performing companies like SEPLAT, Ecobank and Firstbank.

Read more about mutual funds here

How can you access the fund?

1. You need to have the updated version of the Cowrywise app. If you are not a user, download the app here.
2. Scroll down to “Invest in Mutual Funds”.
3. Take the risk assessment, if you have not.
4. Tap “All Funds”.
5. Tap United Capital Eurobond Fund to get started.

How to withdraw from the fund

1. To withdraw from the fund anytime, tap “Plans”
2. Select “Investments”
3. Select your dollar investment plan
4. Tap “Sell Units”

Bear this in mind, if you sell your units before the returns payout date you’ll only gain from price changes. That is if you bought a unit at $10 and sell at $11, you’ve gained $1 per unit. We’ll explain more about returns after the video.

More important details

The Eurobond Fund is meant for long-term investments. It is not fit for short-term investments that are below a year. This is to help grow and preserve the value of your investments. There are two sources of returns when you invest in dollar-asset like Eurobond with Naira:

1. The coupon payment or yield. This is the promised return on the Eurobond. Its return currently sits around 8% per annum.
2. Return from changes in the value of the Naira against the USD. This simply means if Naira loses value against USD, as a Nigerian who has invested in this Eurobond, you have gained additional return.

In simple terms, you have earned returns from two sources: the fixed return on the Eurobond and the change in the value of the Naira per USD.

Finally, it is key to note that you can start with as low as $10 (the naira equivalent). The exchange rate will be determined at the point of investing. Get started with dollar investments today by updating/downloading your Cowrywise app.