“How to find Dollar investments for Nigerians” or “How to save in dollars on Cowrywise” is probably something you searched for to get here.
We get that you want investment options that help you expand your portfolio while giving you a chance to beat the recent inflation rate in Nigeria. Well, you’re in the right place. 😉
How to save and invest in dollar mutual funds on Cowrywise
With Cowrywise, you can now access these Dollar mutual funds: the United Capital Nigerian Eurobond Fund, the ARM Eurobond Fund, the FSDH Dollar Fund and Stanbic IBTC Dollar Fund.
Begin saving and investing in dollars on Cowrywise
- You need to have the updated version of the Cowrywise app. If you are not a user, download the app here
- Click on the “Invest” tab, Click “Create a new investment”
- Take the risk assessment (optional). This is a short assessment that lets you know what type of investor you are – a low, medium or high-risk investor
- Tap “Dollar Mutual Funds” and invest in your preferred option
How to withdraw from the fund
- To withdraw from the fund anytime, tap “Invest”
- Select “USD Mutual Funds”
- Select the dollar investment plan you want to sell
- Tap the three dots at the top right corner
- Tap “Sell Units”
Bear this in mind, if you sell your units before the returns payout date, you’ll only gain if the price per unit has increased. This means that if you bought a unit at $10 and sell at $11, you’ve gained $1 per unit.
Mutual funds and long-term investing
Mutual funds are meant for long-term investments to grow and preserve the value of your investments. It is not fit for short-term investments that are below a year.
Also, there are two sources of returns when you invest in dollar assets:
- Returns/Interests. This is the return you get on your dollar fund investment. On Cowrywise, we show you the Year to Date (YTD) performance of the funds. This is the amount of profit/returns the investment has earned from Jan 1 of the current year till the current date. It is not a guarantee of what the eventual returns might be.
- Return from changes in the value of the Naira against the USD: This means that you gain additional returns as a Nigerian who has invested in dollar funds if Naira loses value against the USD.
Here is an example to drive this point home:
It was 2019
You invested NGN360,000 with a return of 8% per annum. This is converted to USD1,000 at an exchange rate of 360 Naira per 1 USD.
It is 2023
If Naira loses its value against the USD, the exchange rate becomes NGN750 per USD. The USD1,000 you invested would have earned 8% over the first year: 8% x USD1,000 = USD80. This implies you had USD1,080 as the total value of your investment by 2020. The USD1,080 would also have earned 8% over the second year: 8% x USD1,080 = USD86.4. This implies you had USD1,166.4 as the total value of your investment by 2021. The USD1,166.4 would also have earned 8% over the third year: 8% x USD1,166.4 = USD93.3. This implies you had USD1,259.7 as the total value of your investment by 2022. When you convert this value to Naira at the exchange rate of NGN750 per USD, this gives USD1259.7 x 750 = NGN944,775.
Your total return in Naira = N584,775 or 162% of NGN360,000. 🤯
In simple terms, you have earned returns from two sources: the fixed return/interest on the dollar fund and the change in the value of the Naira to USD.
When investing, it is important to study previous trends as it can help you make better decisions to diversify your assets. With as low as $10 (the naira equivalent), you can start investing in the dollar funds available for you on Cowrywise right now.
Get started with dollar investments today by downloading the Cowrywise app. Already have the app? Log in and begin investing in dollar mutual funds now.