Nigeria has attracted the New York-based exchange trade fund (ETF) provider, Global X Funds, which launched the Global X Nigeria Index ETF on Wednesday.
Known for its niche strategies, Global X looks to put at investors’ fingertips unprecedented access to Nigeria, with the launch of two frontier-market-focused ETFs, which included Mongolia and Central Asia.
The fund, which tracks a Solactive index designed by Frankfurt-based Structured Solutions AG, comes with an annual expense ratio of 0.68 percent.
It is expected to serve up direct exposure to some 25 Nigerian companies in a way that has only been available until now in a more diluted way through funds like the iShares MSCI Frontier 100 Index Fund, which allocates some 13.5 percent to Nigeria, where Nigeria represents 4.7 percent of the portfolio.
Nigeria was one of the best-performing stock markets in Africa in 2012, and has continued to outperform emerging market counterparts so far in 2013.
Global X research analyst, Alex Ashby, reckoned that Nigeria is not only oil-rich and one of the world’s major oil exporters, as it also has a booming middle class and rising domestic consumption, which are fuelling growth in gross domestic product (GDP).
“We’ve been looking at Nigeria for a long time and we are very excited about the country’s demographics and growth potential,” Ashby was quoted by IndexUniverse.
Mongolia, on the other hand, has an array of mineral deposits, including oil and precious metals, and is in full expansion mode as it benefits from growing demand coming from neighbouring China.
Ashley noted that Mongolia’s mining industry is still in its infancy, but it should continue to boom as it looks to meet demand from China as well as other international markets.
“China is the bigger driver in that region,” he added.
TEDDY NWANUNOBI
Abuja with agency report
