Stanbic IBTC Asset Management Limited, a subsidiary of Stanbic IBTC Holdings Plc, has concluded plans to launch a new Exchange Traded Fund (ETF). According to the company, to be called the Stanbic IBTC Pension ETF 40, the ETF will mirror the Pension 40 Index.
The launch will bring to two the ETFs in Stanbic IBTC Asset Management Limited’s portfolio. In 2014, the company launched the Stanbic IBTC ETF 30, which tracks the performance of the top 30 stocks listed on the Nigerian Stock Exchange (NSE).
The Pension Index, launched last year by the NSE to drive market optimisation, is a tracking mechanism for investors, particularly institutional investors like Pension Fund Administrators (PFAs), that invest in line with guidelines set out by the National Pension Commission (PENCOM). The NSE Pension Index monitors the top 40 most capitalised and liquid companies in the market.
Commenting on the new ETF, the Chief Executive, Stanbic IBTC Asset Management Limited, Mrs. Bunmi Dayo-Olagunju, said the primary objective of the Stanbic IBTC Pension ETF 40 is to provide investors access to the most liquid publicly quoted companies on the NSE that are compliant with the regulatory requirements for investing pension assets in terms of taxable profits, free float, dividend, sector and individual stock weighting.
“The Stanbic IBTC Pension ETF 40 is designed as an instrument of choice for PFAs, Life Assurance companies, institutional investors, as well as foreign portfolio managers who are desirous of the Nigerian exposure with minimal liquidity and exit risk,” Dayo-Olagunju said.
Highlighting some of the benefits of the ETF, Dayo-Olagunju said the fund would provide investors with a strategic exposure to the equities market, allowing for flexibility, cost effectiveness, diversification of investment, as well as liquidity. She added that it would act as a benchmark for PFAs to measure performance and report same to Retirement Savings Account (RSA) holders.
“The ETF is an asset product which is designed as a cost effective way to provide the same economic value as an investment in the underlying equities. In this case, the Stanbic IBTC Pension ETF 40 will help investors gain access to the 40 most capitalized and liquid equities on the NSE in a seamless way without the costs, risks and complexities associated with direct investments, particularly for retail investors,” Dayo-Olagunju stated.
According to her, the Stanbic IBTC Group, in line with its emerging market strategy and desire to become a one-stop shop for investable products, has invested in world-class investment management and market-making solutions which should ensure that the tracking error of the ETF ranks amongst the lowest in the industry. The fund will also have a dedicated broker publishing bid and offer prices online and real-time and pay out its dividend quarterly.
Dayo-Olagunju noted that Stanbic IBTC Asset Management Limited will continue to leverage its expertise in asset and wealth management, built over the past 20 years, as well as the Stanbic IBTC Group’s rich heritage in corporate and investment banking to provide quality products and services that will not only deepen the market but enhance transparency, add value and lead to investor confidence.