ETF To Be Launched As An Alternative For Investors

The management of the Nigerian Stock Exchange (NSE) has concluded plans to launch the Exchange Traded Funds (ETF) in order to deepen the value of the equities market and provide an alternative investment window for investors.

There would be a formal launch of the ETF on November 21, which will serve as alternative means where investors who are still skeptical about investment in shares could access the stock market for investment purposes.

ETF is an investment vehicle traded on a Stock Exchange, much like shares. Most ETFs are passively managed index funds which normally track an index, with their main objective being to participate in the economic growth of an industry, sector or commodity. ETFs provide the attraction of the returns of a traditional tracker fund (like unit trusts) with the liquidity of a listed security. ETFs are traded at prevailing market prices, which are approximately the same price as the Net Asset Value (NAV) of their underlying assets over the course of the trading day.

ETFs will provide a diversified exposure through buying a single share; offering a market related performance or return; straightforward access to the performance of key indices and sectors; a cost effective way of trading a basket of shares through a single transaction, automatic portfolio, rebalancing of the constituent holdings of the respective index; the flexibility to buy and sell the ETF securities during JSE trading hours.

One Comment

1. 

   Dexter

   November 16, 2011 at 7:22 pm

   “the flexibility to buy and sell the ETF securities during JSE trading hours.” That should be NSE TRADING HOURS right?