By Yakubu LAAH InvestAdvocate
Lagos (INVESTADVOCATE)-The Nigerian stock exchange (NSE) Monday said its set to expand its product offering by the planned listing of Vetiva Griffin 30 exchange traded fund (VG 30 ETF) March 2014.
A statement by Dante Ibidapo Martins seniour manager, corporate communications of the NSE said investors are on standby to witness a welcome augmentation in the Nigerian capital market as the NSE expands its product offerings via the official listing of Vetiva Griffin 30 exchange traded fund in March 2014.
The statement quoted Haruna Jalo-Waziri, executive director (ED) business development at the Nigerian bourse as saying that the VG 30 ETF is an open-ended fund 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” he said.
Jalo-Waziri said in order to provide an alternative investment window for investors, the first ETF was launched on the Nigeria bourse in December 2011. ‘’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,’’ the ED business development at the NSE said.
According to him, the 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.
Osahon Aire, the NSE’s product lead for ETFs said that ETFs are essentially index funds that are listed and traded on the exchange like shares. ‘’Buying and selling ETFs is as simple as buying /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,” Aire affirmed.
On his part, Damilola Ajayi, managing director (MD) of Vetiva Fund Managers Limited said in line with the growing ETF industry, Vetiva developed the VG 30 ETF to give investors optimal exposure to the Nigerian bourse by tracking the movement of the NSE 30 index. ‘’The offer for subscription of 100,000,000 units of the Vetiva Griffin 30 exchange traded fund securities commenced on Monday, 13 January 2014 and closed on Friday, 31 January 2014,” Ajayi said.
He affirmed that further to the successful completion of the offer, ‘’we expect that the VG30 ETF securities will be listed on the floors of the Nigerian stock exchange by March 2014, the Vetiva MD said.
Ernst & Young, third largest multinational professional services firm in the world said the global ETF industry as at October 2013 had 5,042 ETFs, with 10,053 listings, assets of US$2.3 trillion, from 215 providers on 58 exchanges and annual growth of 15%-30% is predicted around the globe over the coming five years.
