The Nigerian Stock Exchange has announced plans to expand its product offerings to investors with the official listing of the Vetiva Griffin 30 Exchange Traded Fund.
The NSE, in a statement on Monday, said that ETF which would be listed this Friday, would broaden the choice of investment options to the investor in the Nigerian capital market.
It quoted NSE’s Executive Director, Business Development, Mr. Haruna Jalo-Waziri, as saying that the open-ended fund, which would be listed on the NSE, would boost trading activities on the NSE.
He said, “The VG 30 ETF is designed to track the performance of the constituent companies of the NSE 30 Index and to replicate the price and yield performance of the Index. The NSE 30 Index comprises of the top 30 companies listed on the Nigerian Stock Exchange in terms of market capitalisation and liquidity and is a price index weighted by adjusted market capitalisation.
“We are using the ETF product category to open up cost-effective diversification opportunities for investors, while giving the broker-dealer community an instrument to better service their clientele. This listing of the VG 30 ETF is anticipated to help advance the investor market in Africa’s fastest growing economy by further broadening the choice of asset classes open to local investors.”
He explained that the first ETF was inaugurated in the Nigerian bourse in December 2011, in order to provide an alternative investment window for investors, in addition to equities and bonds which were prevalent options at the time.
ETFs are essentially index funds that are listed and traded on the Exchange like shares. Buying and selling ETFs is as simple as buying and selling of shares.
Unlike shares and mutual funds however, the ETFs will trade continuously all day long and allow investors to lock in a price for the underlying stocks immediately, rather than being bought and sold based on end-of-day prices.
The offer for subscription of 100,000,000 units of the Vetiva Griffin 30 Exchange Traded Fund securities commenced on Monday, January 13, 2014 and closed on Friday, 31 January 2014.