Best Index Funds in Nigeria

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An index fund is a type of mutual fund or exchange-traded fund. Its portfolio is constructed to match or track the components of a typical financial market index. An index fund is a portfolio of investment holdings that represents a segment of the financial market. An index mutual fund provides a broad market exposure by investing in a variety of asset classes. It an indirect way to buy the whole market. Index funds focus on the size of companies such as those with small, medium or large capital values. They could also focus on a particular sector such as technology or energy.

Best Index Funds in Nigeria

Characteristics of an Index Fund

 Index funds are considered safe.

Index funds are ideal for long term investments

Index funds follow a passive investment strategy

Index funds have low operating expenses because they are not actively managed.

Index funds operate on the theory that investing in a number of funds will pay off in the long run than picking an individual stock. There is an index fund, for nearly every financial market in existence. This article gathers the best Index Funds in Nigeria. Read on below:

The Stanbic IBTC ETF 30

The Stanbic IBTC Exchange Trust Funds 30 is an Index Fund that aims to replicate The Nigerian Stock Exchange 30 Index (NSE 30 Index) as closely as possible before fees and expenses are added. It targets the total return of The Nigerian Stock Exchange 30 Index in terms of income accrued from the underlying securities of the index, as well as price performance. If you buy an Exchange Traded Fund that tracks the NSE 30 Index, it gives you ownership and the performance of all the securities listed in the NSE 30 Index.​ The Stanbic IBTC Exchange Trust Funds 30 is an open-ended fund that invests 100% of its portfolio in equities. It has an expense ratio is 0.5% and can be easily traded on the floor of the Nigerian Stock Exchange.

Benefits of the Stanbic IBTC ETF 30

Diversification: The Stanbic IBTC ETF 30 allays investment risks by investing across a diverse range of assets. When risks are not concentrated in a particular area, it reduces the chances of failure.

Cost Efficiency: The Stanbic IBTC ETF 30 is cost-efficient because it requires less management and administrative costs

Flexibility: With the Stanbic IBTC ETF 30, you can subscribe to any investment of your choice.

Security: Stanbic IBTC ETF 30 is considered a safe long-term investment.

The Nigerian Stock Exchange

The Nigerian Stock Exchange (NSE) is the leading Exchange Traded Fund market in West Africa in terms of the number of listings, turnover value as well as capitalization. The Nigerian Stock Exchange offers a trading platform that delivers on liquidity, transparency, speed and efficiency. Exchange-Traded Funds (ETFs) are securities that track the performance of an index or group of assets. The Exchange Trade Funds are listed on the floor of NSE and are traded just like stocks. The performance of Exchange Trade Funds is determined from the index or underlying assets they track. The NSE Exchange Trade Funds provide investors with the opportunity to diversify their investments in various asset classes and gain exposure to a broader market as well as various investment strategies such as Local fixed income, Local equities, International markets, Commodities and Currency. With the Nigerian Stock Exchange ETFs, an investor can track specific indices such as global, country-specific and asset-specific indices.

Benefits of the NSE Exchange Traded Fund

Diversification: With the NSE Exchange Trade Funds, investors can invest in various asset classes

Access to a broader market: Investors under the NSE Exchange Trade Funds have access to global indices and indices across different sectors.

The NSE Exchange Traded Fund is ideal for the following sets of people:

  • Investors who are looking for optimal returns at a minimal cost
  • Investors looking for efficient access to other markets and asset classes.
  • Passive investors who may not have time to actively monitor the market
  • Investors looking to diversify their assets through a single security

​​You can buy and sell Exchange Traded Products on the Nigerian Stock Exchange through your stockbroker.

Vetiva Griffin 30 ETF

The Vetiva Griffin 30 ETF is an open-ended fund designed to replicate the Nigerian Stock Exchange (NSE) 30 Index in terms of price and yield performance. The NSE 30 Index comprises the top 30 companies listed on the Nigerian Stock Exchange (“NSE”) in terms of market capitalization and liquidity. Investors are able to obtain market exposure to the securities of the constituent companies of the NSE 30 Index. Over the years, the Vetiva Griffin 30 ETF has served as an important diversification tool for all types of investors including individual investors, pension fund administrators, portfolio managers and foreign investors who want to invest in the Nigerian equity markets. Vetiva Griffin 30 also offers its investors professional portfolio management and advisory team that has years of experience in successfully managing investment portfolios in various asset classes and through different market cycles. With the Vetiva Exchange Traded Funds, an investor with just one security has a proportionate share in the economic benefits of all of the securities issued by the constituent companies comprising the Index. The Vetiva Griffin 30 ETF securities are attractive to professional investors because they provide useful asset allocation and cash management tools. The Vetiva funds also have good governance and structure. Investors are assured of the security of their investments and successful investment outcomes. The Vetiva Griffin 30 ETF is a cost-effective way to invest in the NSE 30 Index since a single security purchase gives exposure to the entire index. Vetiva Exchange Traded Fund is sponsored by Vetiva Capital Management Limited while its authorized dealer is Vetiva Securities Limited.. Its trustee is Union Trustees Limited, while its Custodian is UBA Plc (Global Investors Services) (UBA GIS)

Benefits of Vetiva Griffin 30 ETF

Broad market exposure: Vetiva Griffin offers a variety of asset classes open to local investors.

Access to the advisory team: Vetiva Griffin ETF offers investors access to the well experienced advisory team

Optimal benefits: There is maximum benefits for investors with just one security as well as multiple security holders

Cost-effectiveness: The largeness of the fund size is used to reduce transaction costs and consequently enhance portfolio returns.

These are the best Index Funds available in Nigeria.

 




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