By Modupe Gbadeyanka
The value of Exchange Traded Funds (ETFs) on the Nigerian Stock Exchange (NSE) has risen to N6.9 billion since its inception in 2011, the Chief Executive Officer of the NSE, Mr Oscar Onyema, has revealed.
Speaking at a workshop in Lagos last Friday, Mr Onyema said this has made the exchange the second largest ETF market in Africa, behind South Africa’s Johannesburg Stock Exchange (JSE).
“Today, the NSE is the second largest ETF market in Africa with a current market capitalisation of N6.9 billion.
“From a single ETF tracking the price of Gold in 2011, the market has deepened with 10 ETFs currently offering exposure to equities, fixed income, commodities as well as thematic and smart investment solutions.
“The ETFs market segment is radically reshaping the asset-management industry; gradually eclipsing old-fashioned stock pickers given its ability to replicate passive investing styles,” the NSE boss said when the NSE, in conjunction with Meristem Wealth Management Limited, hosted capital market stakeholders and members of the investing public to a Smart Investment Workshop.
The seminar was themed Using Exchange Traded Funds (ETFs) as a Proxy for Investing in Nigerian Equities and had in attendance young, savvy members of the investing public and capital market stakeholders.
He further said with the growing demand for cost-effective, low-risk, diversified and income generating investment instruments, the exchange has identified the ETFs segment as a viable investment option for investors, particularly younger players who are new to the capital market.
According to him, the event was held in line with the exchange’s commitments to deepen capital market activity through innovative and value-driven products and services, as well as provide opportunities for in-depth investor education.
“With the market witnessing low yields, we have seen an increasing appetite for equities, and ETFs present investors with an alternative channel to maximize investment and minimize the risk that comes with investing in equities.
“Consequently, the exchange is resolute in its goal to collaborate with market stakeholders to not only increase listed ETFs, but also provide the necessary sensitization and capacity building that will boost activity in the market,” Mr Onyema noted.
In his presentation at the workshop, Head, Asset Management, Meristem Wealth Management, Mr Taiwo Yusuf, noted that ETFs are inherently designed to give investors access to a wide range of viable assets.
“By investing in ETFs, investors are free from the rigors that come with trading in equities including: stock valuation, screening, selection and liquidity risk. This makes ETFs a more cost-effective investment solution. In addition, ETFs serve as a bespoke product for investors who want to add a tinge of innovation to their investment portfolios,” he stated.
Following the insightful deliberations of the day, three winners emerged in an online quiz to test participants’ knowledge of the ETFs market.
In first place, Sulyman Sulyman won N75,000 worth of investment in ETFs courtesy Meristem Nigeria, as announced by Managing Director, Meristem Wealth Management Nigeria, Mr Sulaimon Adedokun and a goody bag from NSE.
The second place winner, Harding Udoh, was gifted with N50,000 worth of investment in ETFs and a goody bag both from NSE, while the 3rd place winner, Oludipe Abisoye, won N25,000 worth of investment in ETFs courtesy Meristems Nigeria and a goody bag from NSE.
The workshop culminated in a closing gong ceremony on the trading floor of NSE to honour winners of the competition and the management of Meristem Nigeria.
Adedapo Adesanya