Stanbic IBTC, a leading investment bank in Nigeria, would be releasing more Exchange Traded Funds (ETFs) at the Nigerian Stock Exchange (NSE), market sources exclusively told BusinessDay.
A source at the investment bank said, “We have put the first foot out and I believe it was a huge success. We are now looking at other ETFs that track other indexes.”
Another source at the NSE corroborates this, confirming “there is a pipeline of ETFs”.
ETFs allow for passive investments in the stock market. They are a basket of securities that trades like one share and is designed to track an index or investment style. ETFs enable portfolio managers and investors to diversify their portfolios, as an ETF is a collection of multiple shares. Also, in a bear market like the present Nigerian stock market, where investors are shedding assets in their portfolio, ETFs allow for continued exposure to a particular asset class or stock universe.
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Stanbic IBTC in September this year released the Stanbic IBTC 30 ETF which tracks the performance of the NSE 30, the top 30 shares on the Nigerian Stock Exchange by capitalisation and liquidity.
In the coming months, the investment bank source revealed that the new ETFs would track the NSE banking, which covers the banking stock universe, and the NSE oil and gas, which covers the oil and gas stock universe.
