NSE Exchange Traded Funds (ETF) market capitalization hits N24.51 billion

The assets under listing of the Nigerian Stock Exchange ETF market increased to N24.51 billion, as at the end of 2020, indicating an increase of 272%, compared to what was obtainable in similar period in 2019.

This is according to a statement made by the Chief Executive Officer of the Nigerian Stock Exchange, Mr Oscar Onyema, during the recently concluded webinar organized by the NSE, and themed; ‘’NSE 2020 Market Recap and 2021 outlook.’’

Key highlights:

The following are the key highlights of the NSE-ETF market;

• Trading volume increased to 13.02 million units as at the end of 2020, up by +218.23% Year-on-Year.
• Market turnover skyrocketed to N56.66 billion, indicating a massive increase of 51,831% Year-on-Year. This signifies increased interest in Nigeria’s ETF market.

Mr Onyema emphasized that the impressive performance is attributable to a number of factors, such as;

• The unattractive yield in the fixed income market which led investors to seek alternative asset classes.
• The launch of two new ETFs, which are Meristem Growth ETF and Meristem Value ETF.
• The growing adoption of the asset class by investors and asset managers on the back of a strong Year-on-Year growth.

In the same vein, the NSE also announced that one of its subsidiaries – NG Clearing has received approval in principle from the Securities and Exchange Commission (SEC), to launch clearing and settlement of its first Exchange Traded Derivatives (ETDs) as Nigeria’s premier central counterparty clearinghouse.

What you should know:

• According to Investopedia, an exchange-traded fund (ETF) is a type of security that involves a collection of securities—such as stocks—that often tracks an underlying index, although they can invest in any number of industry sectors or use various strategies.
• Unlike mutual funds, ETF trades like a stock on the exchange, with a relatively higher daily liquidity and lower fees.
• Based on the 2020 review, the NEWGOLD ETF emerged as the best performing ETF for the second consecutive year posting a return of 66.03%.