New ETF trades a million pula on BSE
The newly listing of African Domestic Bond Fund Exchange Traded Fund’s Exchange Traded Fund ( ADBF ETF) has recorded turnover of P1.0 million generated from 8,575 units on the Botswana Stock Exchange ( BSE).
ADBF ETF listed on the BSE through secondary listing last month, taking the number of listed ETFs on the bourse to seven, through a collaboration of the African Development Bank ( AfDB) and MCB Investment Management Co, birthed the ETF, first listed in Mauritius.
AfDB acts as an anchor investor and sponsor, with a view to promote local currency finance and contribute to the development of local currency capital markets across the African continent.
The ADBF ETF tracks the performance of the AfDB Bloomberg African Bond Index 25 percent Capped, before fees and expenses. It is primary listed on the Stock Exchange of Mauritius denominated in USD and secondary listed on the BSE in BWP.
According to the latest annual report for ADBF ETF, the Fund invests in Pan- African local currency government and quasi- government bonds on an unhedged basis and as a result provides access to a growing asset class that has significant performance tail winds and remains relatively uncorrelated to major asset classes.
In addition, the ETF structure allows the Fund to do this in a liquid, transparent and cost efficient manner. Though the Fund is exposed to interest and exchange rate risks from within the markets it invests in, the underlying universe is inherently diverse, with commodity exporters such as Nigeria, to commodity importers such as Egypt and well diversified economies in Kenya and South Africa to name a few.
“While we are constructive on the asset class as a whole - due to a mix of growth potential, underlying demographics, commodity risks moderating, better macroeconomic management - the Manager is more exposed to Egypt, South Africa, Zambia and Ghana with an underweight in Nige
ria, Mauritius and Morocco compared to the benchmark.
The Fund will aim to track its bench
mark and attempt to implement the above views within the constraints of the mandate,” read the annual report.