The Nation Newspaper

Tag: ETF

  • Vetiva to list first bond ETF on Stock Exchange

    tiva Fund Managers Limited will next week list its Vetiva S & P Nigeria Sovereign Bond Exchange Traded Fund (VS&P ETF) on the Nigeria Stock Exchange (NSE), blazing the trails as the first bond ETF to be listed on the Exchange.

    The VS & P ETF upon listing would give investors access to Nigerian Federal Government bonds in retail lots; thus providing an opportunity for every Nigerian to invest in Federal Government bonds. At current pricing, investors will be able to purchase a unit for as low as N150 and have access to attractive bond yields.

    Speaking on the product, managing director, Vetiva Fund Managers Limited, Mr. Damilola Ajayi said the listing of the Vetiva S&P Exchange Traded Fund is in line with the Federal Government’s plan to enhance financial inclusion.

    “For the first time in Nigeria, investors now have access to Federal Government bonds through a product that will be listed on the Nigerian Stock Exchange,” Ajayi said.

    According to him, the VS & P ETF when listed will trade like any other stock, and the Fund plans to effect distributions to its unit holders twice a year. Subsequent to listing, investors will also be able to trade the Fund on the NSE through any stockbroker.

    Vetiva listed the first equity ETF-Vetiva Griffin 30 ETF, which tracks the performance of the NSE 30 Index,  in March 2014. Vetiva also listed the first set of sectoral ETF-Vetiva Banking ETF, Vetiva Consumer Goods ETF and Vetiva Industrial Goods ETF, in October 2015.

    Vetiva Fund Managers Limited is a wholly owned subsidiary of Vetiva Capital Management Limited and is registered with the Securities & Exchange Commission (SEC) to carry out business as fund and portfolio manager.

    ETF is a security that tracks the performance of a specified security or other assets including stocks, basket of assets, indices, commodity prices, foreign currency rates, and derivatives among others. There are many types of ETF. Index-based ETF, like index fund, tracks specified market index.

  • Making the Lagos ETF law work

    SIR: The signing of the Employment Trust Fund Bill into law by the Lagos State Governor, Akinwunmi Ambode, is not only commendable and a step in the right direction, it should also serve as a template  for other states in Nigeria, especially at this time of fiscal doldrums, rising unemployment and youth restiveness across the country.

    The N25 billion Employment Trust Fund Law is designed to address the high rate of unemployment in the state through granting of soft loans to individual residents for the purpose of making them self-employed, which will in turn create wealth. These loan facilities, according to the government, range from N100 thousand to N1 million or as may be applicable in each case. The beauty of this law is that only one percent interest would be charged on the loan. Equally gratifying is the fact that this initiative would be funded by the state government through an annual budget of N6.25bn which shall be injected into the fund for the next four years. To walk his talk, the governor has also appointed a 10-man Board of Trustees to manage the fund.

    There is no gainsaying the fact that a mega city like Lagos State, with over 20 million residents deserves a programme such as this. However, genuine steps need to be taken to ensure that this noble idea does not go the way of past similar policies. Transparency and meritocracy should be deployed by the board in administering the fund. For instance, it must ensure that such sentiment as religion, tribe, gender or partisan politics do not play major roles serve as in determining eligible beneficiaries. Mechanisms must also be put in place to ensure that those who receive the loans deploy same for the purpose they obtained them for. It is recommended here that effective bio-data capturing of the beneficiaries should be ensured, while a team be set up by the board to monitor how the loans are being utilized and the result thereof. A technical team to be saddled with the responsibility of scrutinizing the proposals by the applicants and offering technical advice and/or assistance should equally be put in place.

    Similarly, efforts must be made by the Board of Trustees, in conjunction with the state government, to ensure proper and effective public awareness campaigns about the conditions and requirements for the loan facilities. This will help eliminate the issue of corruption that usually bogged down an innovation like this. The board should also, on annual basis, set a goal for itself with respect to the number of beneficiaries for the loan each year, and this should be followed up by quarterly reviews to ensure that these targets are realised.

    Effective management of the fund also entails that the state House of Assembly has a crucial role to play beyond the passage of the law. To this end, the state legislature must ensure an effective oversight on the proper utilization and disbursement of the fund. Experience has shown that the frequent “disappearance” of funds allocated for government project such as this in recent times is largely the failure of the parliamentarians to discharge their oversight function. Official bureaucracy that clogs the easy access to government scheme like this must be avoided or at best minimized. The procedures in accessing the fund should be made a bit flexible just so the essence and objectives of the Fund are not defeated.

    Every effort must be made to prevent politicians and other unscrupulous elements from hijacking this initiative. Thankfully, the composition of members of the Board of Trustees is a strong signal that the government is determined this time to avoid the errors of the past where partisanship had always clogged the progress of related policy. But more fundamentally, it is the collective efforts of critical stakeholders, including the media that would ensure the successful implementation of this programme.

     

    • Okoro Gabriel, Esq.,

    Lagos.

  • Ambode picks Omoigui-Okauru, nine others for ETF Board

    Lagos State Governor, Mr. Akinwunmi Ambode, on Wednesday appointed a former Chairman of the Federal Inland Revenue Service, Mrs. Ifueko Omoigui-Okauru to head the Board of Trustees of the N25billion State Employment Trust Fund (ETF).

    The Governor in a statement signed by his Chief Press Secretary, Mr. Habib Aruna, also approved the appointment of nine others to serve as members of the ETF board.

    ETF is conceived to address youth unemployment and promote wealth creation through entrepreneurial development in the state.

    Other members of the Board are – Mr. Dele Martins, Mrs. Bilikis Adebiyi-Abiola, Mr. Otto Orondaam, Mrs. Olufunmi Olatunde Daudu, Mr. Tunde Bank-Anthony and Mr. Micheal Popoola Ajayi.

    Governor Ambode also picked the state’s Commissioner for Wealth Creation, Mr. Tunde Durosinmi-Etti and his counterpart in the Ministry of Finance, Dr. Mustapha Akinkunmi to be part of the board, while Mr. Akintunde Oyebode will serve as the Executive Secretary.

     

  • Group lauds Ambode over 2016 budget, ETF

    Group lauds Ambode over 2016 budget, ETF

    The leadership of National Image, a non-profit youth advocacy organisation has expressed confidence in Governor Akinwunmi Ambode’s government to fully implement the 2016 budget signed into law two days ago.

    National Image coordinator, Seyi Bamigbade who spoke to journalists Wednesday in Lagos expressed delight at the 2016 appropriation bill especially in respect of provisions for capital projects and youths empowerment.

    According to the coordinator, the budget tagged “the people’s budget” if fully implemented will translate to a lot of development and create job opportunities for the teeming unemployed youths in the state.

    “We have always had confidence in Governor Akinwunmi Ambode and that was why we gave him our full support during the electioneering period. We know he can do it and considering the provisions in his first full budget, we are not disappointed at all.

    “The budget has a lot of goodies for the youths considering the amount of money appropriated for wealth creation and employment generation. We only want to appeal that those concerned in the implementation of these policies go about it truthfully and diligently,” he said.

    The group also lauded Ambode for signing N25 billion Employment Trust Fund (ETF) Bill into law; saying the fund has the potential of pulling thousands of youths out of unemployment markets.

    It will be recalled that Ambode had prior to his election promised to establish an ETF scheme to address the challenges of unemployment in the state.

    According to the governor, each year, the state government would inject N6.25 billion into the fund for a period of four years, making N25 billion cumulatively.

    He added that a board of trustees would be announced in due course to manage the fund, saying that members of the board shall be outside the purview of government.

  • Ambode signs N25bn ETF bill into law

    Ambode signs N25bn ETF bill into law

    Governor Akinwunmi Ambode of Lagos State on Tuesday signed into law the N25 billion Employment Trust Fund (ETF) bill, aimed at tackling the high rate of unemployment in the state.

    Ambode said at the Lagos House, Ikeja, that the signing was a milestone of his administration to tackle the challenges of unemployment through granting of soft loans to individuals for the purpose of making them self-employed, to create wealth.

    He said one of the promises he made to residents during his campaign was to set up an ETF scheme to address the challenges of unemployment in the state.

    “Each year, the state government will inject N6.25 billion into the fund for a period of four years, making it N25 billion cumulatively,” he said

    According to him, a board of trustees will be announced in due course to manage the fund.

    He said that members of the board would be outside the purview of government.

    The News Agency of Nigeria (NAN) reports that Ambode, in November 2015, sent the ETF bill to the State House of Assembly for approval.

    The fund is aimed at transforming employment creation in the state over the next four years.

    It will be administered as soft loans to bona fide residents of the state who desire facilities between N100, 000 and N1 million or more.

    The fund will be administered through an independent Trust backed by an efficient structure that will disburse the funds.

    The Ministry of Wealth Creation and Employment, created in June by the governor, will oversee the affairs of the scheme, while the funds will be channeled through the state’s micro-finance institutions.

    About one per cent interest rate will be charged on the loan to take care of administrative expenses.

  • Senate summons ETF boss over alleged N200b diversion

    Senate summons ETF boss over alleged N200b diversion

    The Senate Wednesday invited the Executive Secretary of the Education Tax Fund (ETF), Professor Suleiman Elias Bogoro over alleged gross mismanagement of education tax fund between 2011 and 2015.

    The Education Tax Fund boss is to appear before the Senate Committee on Tertiary Institutions and Tetfund to explain alleged misappropriation of the fund in the Fund from 2011-2015.

    He is also to throw some light on alleged diversion of N200 billion “to other unknown and unspecified uses not recognized in or permitted under the Act.”

    The resolution to invite Bogoro followed the adoption of a motion entitled “Gross mismanagement of Education Tax Fund 2011-2015.”

    The motion was sponsored by Senator Abdullahi Aliyu Sabi (Niger North).

    Senator Sabi in his lead debate noted that Education Tax Fund are funds generated from education tax that are utilized to improve the quality of education in Nigeria.

    He noted the Tertiary Education Trust Fund (establishment etc) Act, 2011 is the Act that repealed the Education Tax Act CAP E4 laws of the federation of Nigeria, 2004 and Education Trust Fund charged with the responsibility for imposing, managing and disbursing the tax to public tertiary institutions in the country.

    Sabi said that Section 6(a) of the Tertiary Education Trust Fund Act, 2011 stated that the Board of Trustees shall monitor and ensure collection of education tax by the service and ensure “transfer of same to the Fund.”

    The Niger North lawmaker said that he is aware that Section 7(a) of the Tertiary Education Trust Fund Act, 2011 stated that the Board of Trustees shall administer, manage and disburse the tax imposed by the Act on the basis of the equity among the six geo-political zones of the federation in the case of special intervention.

    Sabi said that he is further aware that some institutions get multiple allocation of special intervention while institutions that are their peers do not receive any.

    He expressed concern that “about N200 billion of the education tax collected between 2012 and 2013 were diverted to other unknown and unspecified uses not recognized in or permitted under the Act and the diverted fund are to be returned into the fund.”

    He further expressed concern that the Board of Trustees granted a loan to the Federal Ministry of Education and also organized a workshop and pre-retreat in U.S. and Kenya in 2014-2015 without a recourse to guidelines of the Act.

    Sabi said that it was also a matter of interest to him that “a whopping sun of about N500 million was budgeted for advertising and media in 2015 budget which contravene the “Rehabilitation, Restoration and Consolidation of tertiary education in Nigeria in accordance with Section 3(1) of the Tertiary Education Trust Fund Act, 2011.”

    He said that Senate should be worried that after spending nearly N1 trillion between 2011-2015 by Tetfund still that state of infrastructure in the country’s tertiary education institutions is still very shabby, dilapidated and mostly run down.

    Though the motion was not debated, Senate President, Abubakar Bukola Saraki said that the relevant committee should conduct a thorough investigation to establish the truth about the allegations.

    Saraki noted that if the allegations are true, Nigerians should be aware that the Senate should not close its eyes to what is going on.

    He mandated that committee to report back to the Senate in plenary within one month.

     

  • STANBIC IBTC ETF 30 distributes dividends to investors

    Investors in Stanbic IBTC Exchange Traded Fund (ETF) 30 will receive a payment of N1.56 per unit next week, according to official filing by the ETF promoter and manager, Stanbic IBTC Asset Management Limited (SIAML).

    The register of unitholders and transfer books of Stanbic IBTC ETF 30 is expected to be closed on Monday, October 26 while payment will be made on Friday October 30, 2015 to unitholders registered in the fund as at the close of business on Friday, October 23, 2015.

    Stanbic IBTC Asset Management Limited (SIAML), a wholly owned asset management subsidiary of Stanbic IBTC Holdings Plc, had launched initial offering of 10 million units of the Stanbic IBTC ETF 30 at a price of N100 per unit. The offer was however oversubscribed and SIAML listed 11.447 million units valued at N11.447 billion.

    An Exchange Traded Fund (ETF) is an investment vehicle that tracks an index, a basket of assets, or a commodity but trades like regular shares on a stock exchange.

    The Stanbic IBTC ETF 30 invests 100 per cent of its assets in the same portfolio of securities that comprise the NSE 30 Index in proportion to their weightings in the underlying index. The objective of the Fund is to replicate as closely as possible the total return of the NSE 30 Index. The NSE 30 Index tracks the 30 most capitalised stocks on the NSE.

    Managing director, Stanbic IBTC Asset Management Limited (SIAML), Mr Olumide Oyetan, had explained that the NSE 30 Index comprises of the top 30 companies in terms of market capitalization. The index serves as the flagship benchmark for the stock market as it represents 92 per cent of the NSE’s market capitalization.

    He noted that the Fund represents a convenient and efficient way for investors to have access to the top 30 most capitalized and liquid stocks on the NSE, in a cost effective manner.

    He pointed out that the Stanbic IBTC ETF 30 will differentiate itself in the marketplace as a highly liquid and transparent investment adding that the financial services group would leverage on its extensive client base and brand name to promote Nigerian ETF to Nigerian and international investors.

     

     

    “Our target is to keep the expense ratio at one per cent. We are looking at growing this Fund to become one of the largest funds in the market,” Oyetan said.

     

     

  • Vetiva’s VG 30 ETF declares interim dividend

    Vetiva Griffin 30 Exchange Traded Fund (VG30 ETF), an exchange traded fund (ETF) that tracks the performance of the 30 most capitalised stocks on the Nigerian Stock Exchange (NSE), will tomorrow distribute interim dividend of 12 kobo per unit to investors.

    The interim distribution would be made tomorrow to unitholders that were on the register of the ETF as at the close of business on Monday August 10, 2015.

    Vetiva Griffin 30 Exchange Traded Fund (VG30 ETF) is managed by Vetiva Fund Managers Limited, a wholly owned subsidiary of Vetiva Capital Management Limited, which is registered with the Securities & Exchange Commission (SEC) to carry out business as fund and portfolio manager.

    VG30 ETF tracks the price and yield performance of the NSE 30 Index-an index of the 30 most capitalized and liquid stocks listed on the NSE. It was listed in March, last year.

    ETF is a security that tracks the performance of a specified security or other assets, including stocks, basket of assets, indices, commodity prices, foreign currency rates, and derivatives among others. There are many types of ETF. Index-based ETF, like index fund, tracks specified market index.

    ETFs are essentially index funds that are listed and traded on the Exchange like shares. Buying and selling ETFs is as simple as buying and selling of shares. Unlike shares and mutual funds however, the ETFs will trade all day 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.

    Managing Director, Vetiva Fund Managers Limited, Mr. Damilola Ajayi, who manages the VG30 ETF, had explained that the interim distribution was in line with the structure and design of the VG30 ETF, which include distribution of returns twice a year.

    He noted that Vetiva Griffin 30 Exchange Traded Fund represents a convenient and efficient way for investors to have access to the top 30 most capitalised and liquid stocks on the NSE, both from a potential capital appreciation and distribution income points’ of view.

    He noted that the VG30 ETF was the first equity-based ETF to be listed on the NSE.

    Vetiva Fund Managers recently held signing ceremony for the proposed initial offer for subscription of three new ETFs included Vetiva Banking Exchange Traded Fund (VB ETF), Vetiva Consumer Goods Exchange Traded Fund (VCG ETF) and Vetiva Industrials Exchange Traded Fund (VI ETF).

    Vetiva Fund Managers Limited, upon receipt of final approval from SEC, plans to list the ETFs based on the NSE Banking Index, NSE Consumer Goods Index and NSE Industrial Index respectively, on the floors of the NSE.

     

  • ‘Allow private varsities to access ETF, TEFUND’

    tHE Proprietor of Al-Hikmah University, Ilorin, Kwara State, Chief AbdulRaheem Oladimeji, has urged the Federal Government to allow privately-owned universities have access to the Education Tax Fund (ETF) and Tertiary Education Tax Fund (TETFUND).

    Oladimeji said such financial assistance would cushion the effects of heavy running cost being shouldered by proprietors of private universities in the country.

    The business tycoon told reporters in Ilorin, the state capital, at the maiden edition of Inter-university Qur’an Recitation and Memorisation Competition hosted by the university.

    He added that these funds were drawn mainly from the organised private sector (OPS) of which the owners of these private universities are contributors.

    Denying private institutions the benefits accruing there from would be unjust, especially considering the roles of these universities in bridging the gap in the yearly university admission search by millions of youths, he said.

    Oladimeji appraised the entrepreneurship programmes of Al-Hikmah University and expressed the hope that graduates of the university would develop their potentials and skills acquisition drive which the institution offers them to be job providers, rather than job seekers.

  • How ETF is expanding frontiers of Nigeria’s capital market

    FOR companies desirous of raising equity, exchange traded fund appears to be the best and perhaps, safest choice.

    Interestingly, Lotus Capital Limited, a pioneer and house hold name in ethical fund management in Nigeria, has launched the first Shari’ah compliant Exchange Traded Fund in sub-Saharan Africa- the Lotus Halal Equity Exchange Traded Fund (“LHE ETF”), with a target of raising about N1.5 billion during the initial offer period. The offer opened on  August 15, to close on September 11. Subscription is at an indicative unit price approximately equal to 1/200th of the value of the NSE-Lotus Islamic Index (“NSE LII”) on the day preceding the subscription.

    The LHE ETF would be listed and traded on the Nigerian Stock Exchange (NSE) and will contribute to overall market capitalisation and the global exchange traded fund universe.

    ETFs are dynamic instruments usually designed to track different types of indexes such as equities, bond or commodity. The indexes can be sector specific such as those limited to oil and gas companies, construction companies, banks, financial services, or commodities such as precious metals, and export crops, among others.

    Some indexes may also be thematic, such as the NSE-LII, which tracks the performance of Shari’ah complaint stocks listed on the NSE. Some indexes are jurisdiction specific i.e they track the performance of major stocks in particular jurisdictions, such as the HSBC Frontier Markets ETF tracking Nigerian and Kenyan stocks.

    As of today, there are only two ETFs listed in Nigeria-the New Gold ETF and the Vetiva Griffin 30 ETF. The New Gold ETF is sponsored by ABSA Capital in conjunction with Vetiva Capital Management Ltd. The ETF continuously tracks the spot price of gold in the South African market. The Vetiva Griffin 30 ETF is sponsored by Vetiva Capital Management Ltd and it tracks the NSE 30 index, a basket of the 30 most highly capitalised and liquid stocks on the NSE.

    The LHE ETF is designed as an open ended fund intended to track the yield and performance of the NSE-LII. The NSE LII was initially developed by Lotus Capital Ltd in 2009 and publicly launched in conjunction with the NSE in 2012 to track the performance of Shari’ah compliant stocks on the NSE.

    The underlying stocks in the NSELII undergo what is known as Shari’ah or Islamic screening by the fund manager, Lotus Capital, before inclusion in the index. There are two levels of screening– qualitative and quantitative. The qualitative screening eliminates unethical subsectors or subsectors, which are not permissible under Islamic law such as companies dealing in alcoholic beverages, tobacco, conventional financial services, gambling and adult entertainment.  The second stage, which is the qualitative screening, employs the use of financial ratios and factors to eliminate listed companies with unacceptable levels of debt, cash and interest income.

    As noted previously, there are only two ETFs currently listed on the NSE. They are NEWGOLD ETF, which  tracks the price of Gold Fix PM on the London Stock Exchange(“LSE”) and Vetiva Griffin 30 ETF, which tracks the NSE 30 index (a basket of the 30 most highly capitalised and liquid stocks on the NSE). Since inception, VG30, alongside the index tracked (i.e NSE30) has outperformed the NSEAll Share Index with a year to date currently at 10.06 per cent (vs NSEASI 7.95 per cent).

    The LHE ETF will offer investors competitive yields, as the constituent securities in the underlying index are fundamentally sound, consisting of companies like Dangote Cement Plc, which contributes 20 per cent to market capitalisation, WAPCO (1.82 per cent) and Nestle (4 per cent). In terms of liquidity, the LHE ETF will be listed and actively traded on the NSE. In addition, Vetiva Securities Limited, the ETF’s Authorised Dealer will provide liquidity by continuously providing two-way quotes for the LHE ETF on the floor of the NSE. In this way, the Authorised Dealer will be available to buy the units of any holder at any time.

    Expectedly, following on the heels of Lotus Halal Equity, Stanbic IBTC Asset Management Limited (SIAML), a wholly owned asset management subsidiary of Stanbic IBTC Holdings Plc, recently concluded pre-offering process for the initial public offering (IPO) of its Stanbic IBTC Exchange Traded Fund (ETF) 30, paving the way for the opening of the application list for the ETF.

    At the signing ceremony in Lagos, directors of SIAML and other professional parties signed on the prospectus and other offer documents for the issuance of 10 million units of the Stanbic IBTC ETF 30 at a price of N100 per unit.

    Application list for the IPO will open on Monday, September 15, to close on Wednesday, October 15. Minimum subscription is 10,000 units and multiples of 5,000 units thereafter. The signing ceremony was sequel to approvals for the registration and listing of the units of the fund from the Securities and Exchange Commission (SEC) and the NSE. Stanbic IBTC Capital Limited is the issuing house to the offer.

    Speaking at the signing ceremony, Chief Executive Officer, Stanbic IBTC Holdings Plc, Mrs. Sola David-Borha said the launch of the Stanbic IBTC ETF 30 reaffirms Stanbic IBTC as a leader and pioneer that has consistently brought innovative products and services to the capital market.

    According to her, the Stanbic IBTC ETF 30 would further help to showcase the leadership of the financial services group.

    She pointed out that the holding structure of the Stanbic IBTC Holdings makes it easier for the group to quickly complete financial transactions and deals.

    Echoing similar sentiments, Executive Director, Business Development, Nigerian Stock Exchange (NSE), Haruna Jalo-Waziri described ETF as one of the fastest growing asset classes, adding that the Exchange would support the growth of the asset class in Nigeria.

    He expressed confidence in the Stanbic IBTC ETF 30, noting that the holding company has proven to be a valuable partner in capital market development.

    Managing Director, Stanbic IBTC Asset Management Limited (SIAML), Mr. Olumide Oyetan, explained that the NSE 30 Index comprised of the top 30 companies in terms of market capitalisation. The index serves as the flagship benchmark for the stock market as it represents 92 per cent of the NSE’s market capitalisation.

    He noted that the Fund represents a convenient and efficient way for investors to have access to the top 30 most capitalised and liquid stocks on the NSE, in a cost effective manner.

    “We believe that it will appeal to sophisticated and institutional investors who believe in the growth story of companies listed on the NSE and by corollary, in the abundant growth opportunities that exist in Nigeria,” Oyetan said.

    Stanbic IBTC Capital Limited Chief Executive Officer, Ms Yewande Sadiku, commended the board of SIAML for its efforts towards the deepening of the Nigerian capital market through listing of new and innovative products.

    Lending credence to the foregoing, Managing Director, Vetiva Fund Managers Limited, Mr. Damilola Ajayi, who manages the VG30 ETF, explained that the interim distribution was in line with the structure and design of the VG30 ETF which include distribution of returns twice a year.

    According to him, Vetiva Griffin 30 Exchange Traded Fund represents a convenient and efficient way for investors to have access to the top 30 most capitalised and liquid stocks on the NSE, both from a potential capital appreciation and distribution income points of view.

    Ernst & Young, the third largest multinational professional services firm in the world, has reported that the global ETF industry had 5,042 ETFs, with 10,053 listings, assets of US$2.3 trillion, from 215 providers on 58 exchanges as at October last year. It also predicted annual growth of 15 per cent to 30 per cent globally over the next five years.