We pride ourselves on our global coverage of the ETF industry at ETF Express and this week we brought you a feature from South Africa’s Prescient Capital Markets’ Ben Meyer on the growth of ETFs across the African continent.
Check out the Absa NewGold ETF which, in addition to its primary listing on the JSE, is listed in Nigeria, Namibia, Mauritius, Kenya, Ghana and Botswana as an inward listing.
Meyer tells us that, in Botswana, NewGold is the second most valuable counter on the Botswana Stock Exchange, making up just over 4 per cent of the exchange, while in Ghana it is the 16th largest listing.
Meyer writes that, as ETF specialists, his firm is witnessing increased interest from South African ETF issuers in listing their ETFs on African stock exchanges, other than the Johannesburg Stock Exchange (JSE). More listings could play an important role in providing much-needed liquidity on these exchanges and increase investors’ options in these markets, he says.
“Africa represents a massive number of consumers who will increasingly look for suitable investment opportunities and, secondly, there are South African asset management businesses that already have a footprint in Africa as they have acquired business interests across the region,” Meyer writes.
Those clever people over at Cerulli Associates have taken on the recent and rapid growth of active ETFs in the US. “There is particular emphasis on product development within the transparent active segment,” says Kevin Lyons, senior analyst. “87 per cent of ETF issuers tell Cerulli they are currently developing transparent active ETFs, and 50 per cent of ETF issuers plan to convert at least one mutual fund into a transparent active ETF, taking advantage of the benefits of an ETF wrapper (lower costs and better tax efficiency).”
Cerulli also notes that some of the US platforms stand in the way of more exotic ETF products and also calls for greater education for advisers. Lyons concludes: “As development of active ETFs progresses, ETF issuers will need to maintain collaboration with wealth management teams to boost product placement, enhance educational resources, and tackle potential challenges for successful distribution.”
Take a peek at our weekly US ETF listings columns, brought to you by STOXX, which show such a wide range of new ETFs arriving in the US market, and so much of it, flooding in each week.
Beverly Chandler, Managing Editor
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