Nigerian Exchange Traded Funds (ETFs) rounded off the week on a negative note, as the total net asset value of the investment declined by 1.29% between 1st and 8th of April 2022, leading to a loss of N128.03 million in a week.
This is based on weekly data released on the performance of mutual funds in the country by the Securities Exchange Commission (SEC).
According to the data, the net asset value of ETFs in the country declined from N7.26 billion recorded as of the 1st of April 2022 to stand at N7.13 billion as of the end of the week in review.
In terms of unit price, the twelve ETFs listed on the SEC recorded a 0.21% average decline during the week, with only two of the fund printing positive returns, while seven of them recorded negative returns in unit price.
Here is how they performed
VETBANK ETF – 1.69%
- The Vetiva-Banking ETF, which is managed by Vetiva Fund Managers Limited recorded a 1.69% growth in its offer price in the week under review to stand at N4.21 as of 8th April 2022. However, its net asset value declined by 3.84% to N335.93 million compared to N349.34 million recorded as of the previous week.
- Meanwhile, the VETBANK ETF is an open-ended Exchange Traded Fund managed is designed to track the performance of the constituent companies of the NGX BANKING Index and to replicate the price and yield performance of the Index.
- The NGX BANKING Index comprises of the top 10 banks listed on the Nigerian Exchange Limited (“NGX”) in terms of market capitalization and liquidity and is a price index weighted by adjusted market capitalization.
Stanbic IBTC ETF 30 Fund – 1.33%
The Stanbic IBTC ETF 30, which aims to replicate as closely as possible, the total return of The Nigerian Exchange Limited 30 Index (“NGX 30 Index” or “Index”) in terms of price performance as well as income from the underlying securities of the index.
The fund gained 1.33% in the review week in terms of unit price, while the net asset value moved upward by 0.33% to stand at N480.61 million as of 8th April 2022.
Meanwhile, New Gold ETF, SIAML ETF 40, Greenwich ALPHA ETF all closed flat during the week. On the flip side, Vetiva S&P Nigerian Sovereign Bond ETF, Lotus Capital Halal ETF, and Meristem Growth ETF recorded 1.47%, 1.32%, and 1.03% declines respectively.
A look at the Equities market
The Nigerian All-Share index close bearish during the week, declining by 0.45% to stand at 46,631.46 index points. The NGX 30 index also dipped by 0.43% during the week, while NGX Sovereign Bond index declined by 0.05% to close at 860.56 points.
What are ETFs
- An exchange-traded fund (ETF) is a type of pooled investment security that operates much like a mutual fund, but typically tracks a particular index, commodity, sector, or asset.
- A major factor that sets ETFs apart from mutual funds is that they can be purchased or sold on a stock exchange the same way that a regular stock can.
- Also, an ETF can be structured to track anything from the price of an individual commodity to a large and diverse collection of securities. ETFs can even be structured to track specific investment strategies.