Mutual Funds vs Treasury Bills

2 Mins read
Mutual Funds vs Treasury Bills

Differences between Mutual Funds and Treasury Bills

1Diversified holdings in stocks, bonds, and other financial instrumentsShort-term debt securities issued by the government
2Higher risk, potential for bigger returnsLow risk, low return
3Managed expertly by a fund managerNo professional management, backed by the government of a nation
4Potential for income and capital growthGuaranteed return in the form of interest at maturity
5Moderately liquid, with the ability to acquire and sell shares in the fundHighly liquid, can be sold at any time

Are Treasury Bills Safer than Mutual Funds?

Treasury Bills and Mutual Funds are both considered to be low-risk investments. However, treasury bills are typically thought to be safer than mutual funds because they are backed by the government in full faith and credit. This means that the risk of default is very low.

It’s important to remember that investments with lesser risks often have lower returns. This means that while T-bills may be a safer investment option, the potential for higher returns is lower compared to mutual funds. 

More on Treasury Bills

T-bills have maturities ranging from a few days to a year and are offered for sale at auction. At maturity, investors get their money back in the form of interest plus the T-bill’s face value. Retail and institutional investors regularly utilize T-bills to diversify their portfolios and earn a guaranteed return on their investments.

More on Mutual Funds

Mutual Funds are a type of investment that allows you to invest in different types of assets at once while allowing you to be as hands-off as possible with paperwork and other difficulties. The shares of a mutual fund fluctuate in value according to how well these assets perform, offering investors the chance for both capital growth and income.

Government mutual funds

These are mutual funds that invest in government-issued assets, such as Treasury bonds, bills, and notes. These funds are designed to give investors wishing to diversify their portfolios a low-risk investing choice. A qualified fund manager oversees the portfolio and makes investment choices on behalf of the fund’s shareholders. 

Invest in mutual funds on Cowrywise

Do you want to enjoy this mix of investment options from leading fund managers in Nigeria? It only takes a few minutes. Simply follow these steps:

  • Get the updated Cowrywise app here
  • Create your account or sign in to your existing account.
  • Tap “Invest
  • Then choose your preferred mutual funds option.

It’s important to take your risk assessment to understand your investor type, and we will show you options tailored to your appetite.

View available mutual funds on Cowrywise.


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