‘IBTC Pension ETF 40 would provide diversification options for investors’ 

Stanbic IBTC Asset Management Limited, a subsidiary of Stanbic IBTC Holdings Plc, has stated that the Stanbic IBTC Pension ETF 40, would provide investors with a strategic exposure to the equities market for diversification of investment.

The Chief Executive, Stanbic IBTC Asset Management Limited, Mrs Bunmi Dayo-Olagunju, noted that aside diversification options, investors would also enjoy flexibility, cost effectiveness, as well as liquidity with the new exchange traded fund (ETF), which would be launched soon.

She noted that the launch would bring the total ETFs in Stanbic IBTC Asset Management Limited’s portfolio to two.

“In 2014, the company, the largest non-pension asset manager in Nigeria, launched the Stanbic IBTC ETF 30, which tracks the performance of the top 30 stocks listed on the Nigerian Stock Exchange.

“The Pension Index, launched last year by the Nigerian Stock Exchange (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).”

Dayo-Olagunju also pointed out that the product would provide investors access to the most liquid publicly quoted companies on the NSE that are in compliance 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.

She added that it would act as a benchmark for PFAs to measure performance and report it 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 capitalised 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 would also have a dedicated broker publishing bid and offer prices online and real-time and pay out its dividend quarterly.

She added that the firm would continue to leverage its expertise in asset and wealth management built over the years to provide quality products and services that would not only deepen the market but enhance transparency, value and boost investors’ confidence.