Vetiva Fund Managers Rebalances Exchange Traded Fund Suite

Kayode Tokede 

Vetiva Fund Managers Limited, yesterday announced the rebalancing of the Vetiva Exchange Traded Fund (ETF) Suite in line with the bi-annual review of the Nigerian Exchange Limited (NGX) Indices which include, but are not limited to, the NGX 30, NGX Banking, NGX Consumer Goods and NGX Industrial Indices.

Exchange Traded Funds (ETFs) are securities that replicate/track the performance of an underlying index, commodity or basket of assets.

In a statement issued by Vetiva Fund Managers Limited, it was stated that the weights of the security components of the NGX 30 Index, NGX Consumer Good Index and the NGX Industrial Index were adjusted with no changes to the individual securities.

However, for the NGX Banking Index, the rebalancing reflected that:  FBN Holdings Plc, FCMB Group Plc, Guaranty Trust Holding Company Plc (GTCO) and Stanbic IBTC Holdings Plc are the incoming stocks, while Jaiz Bank Plc, Unity Bank Plc and Wema Bank Plc are the outgoing stocks.

In line with this, Vetiva’s Equity ETFs are typically rebalanced accordingly to reflect the NGX Indices, as changes to components and weights of the underlying indices will typically require corresponding adjustments to the ETF portfolios, to ensure the objective of tracking the price and yield performance of the relevant indices.

Vetiva’s ETF Suite comprises of the Vetiva Griffin 30 ETF, Vetiva Banking ETF, Vetiva Consumer Good ETF, Vetiva Industrials ETF and the Vetiva S&P Nigerian Sovereign Bond ETF which tracks the performance of the NGX 30 Index, NGX Banking Index, NGX Consumer Goods Index, NGX Industrials Index and the S&P/FMDQ Nigeria Sovereign Bond Index respectively. The ETFs trade like any other listed stock on the Stock Exchange (NGX) and units of the ETFs can be purchased on the floor of the Exchange through any broker.

Speaking on ETFs and the ETF rebalancing, the Portfolio Manager, Exchange Traded Funds at Vetiva, Ms. Jesusetuntun Ajagun, said,  “Investing in ETFs offers investors the opportunity to easily express their investment objectives using a single security comprising several underlying assets”.

Ajagun pointed out various ETF benefits such as, a diversification opportunity with relatively reduced risk exposure as investors are not invested in a single instrument, a higher degree of transparency as the indices being tracked are typically publicly available and investors can therefore easily tell what the constituents of a particular ETF will be.

She also noted that Vetiva’s ETF suite largely mirrored the performance of the respective indices they track and the broad sentiments of the equities market.

Finally on the benefits, she highlighted the cashflow benefit and stated that the Vetiva Griffin 30 ETF and Vetiva Banking ETF have consistently paid dividend every year since these ETFs got listed on the Exchange and emphasized this might be interesting for investors who are on the lookout for dividend paying investments.

Furthermore, she noted that ETFs are not new, that they began in the 1980’s and quickly gained popularity as investors started looking for alternatives to Mutual Funds. Since then, the global ETF industry has grown to over $1.5 trillion in assets with over 5,400 ETFs available around the world. 

With this, she reiterated Vetiva’s commitment to creating financial vehicles that help investors create wealth which was evidenced in their introduction of the first equity ETF listed on the Nigeria Stock Exchange in 2014.

In terms of Performance, she presented information on the Vetiva Equity ETF Year-to-date performance as of December 2023, alongside data on the relevant indices being tracked. As of 29th December 2023, the NGX 30 Index, NGX Banking Index, NGX Consumer Goods Index and the NGX Industrial Goods Index returned 51.44per cent, 113.54 per cent, 90.39 per cent and 12.86 per cent year-to-date respectively with similar price return reflected in the relevant ETFs tracking the indices.

Notably, the Vetiva Griffin 30 ETF returned 46.74 per cent, Vetiva Banking ETF returned 108.75per cent, Vetiva Consumer Goods ETF returned 93.54per cent and Vetiva Industrial Goods returned 10.46per cent in the same period.