Nigeria’s exchange-traded fund market had a rough August.
Ten of the 12 ETFs tracked on the Nigerian Exchange finished the month lower, with the SIAML Pension ETF 40 taking the hardest hit. Its quoted market price fell 43.86%, from ₦3,103 at the end of July to ₦1,742 in August.
The Stanbic IBTC ETF 30 was not far behind. It lost 41.07%, closing the month at ₦1,650 from ₦2,800.
Those are unusually large moves for funds built to track diversified baskets of assets. But there is an important qualification: the price investors see on the exchange is not necessarily the same thing as the value of the assets sitting inside an ETF.
Nairametrics’ analysis of August NGX ETF trading found that thin liquidity can create sizeable gaps between an ETF’s market price and its net asset value. That makes the August numbers less straightforward than simply saying the underlying investments collapsed by 43.86%.
The distinction matters.
SIAML Pension ETF 40 tracks the NGX Pension Index and uses full replication, meaning the fund is designed to hold the securities represented in that benchmark. Stanbic IBTC Asset Management describes the fund as fully invested in equities and lists companies including Airtel Africa, MTN Nigeria, Dangote Cement, GTCO, Zenith Bank, Seplat Energy and BUA Foods among its holdings.
Stanbic IBTC’s SIAML Pension ETF 40 fund information put the offer price per unit at ₦744.72 on September 1 and the NGX Pension Index at 12,911.52.
That separation between quoted exchange prices and fund-level pricing is exactly why a thinly traded ETF can produce eye-catching percentage moves without every security in its portfolio experiencing anything comparable.
August erased much of July’s ETF recovery
The sell-off was broader than SIAML.
Meristem Growth ETF fell 13.33% to ₦130, while the Vetiva Consumer Goods ETF declined 13.79% to ₦50. The Vetiva S&P Nigeria Sovereign Bond ETF lost 15.62%, and Greenwich Alpha ETF dropped 17.21%.
Greenwich’s reversal was particularly sharp because it had been one of July’s strongest performers, gaining 30.41% that month.
Only two funds finished August in positive territory.
Vetiva Banking ETF rose 2.83% to ₦31.94, while Vetiva Griffin 30 ETF gained the same percentage to close at ₦109.
The numbers amount to a fairly abrupt reversal. Nine of the 12 tracked ETFs had gained in July. One month later, ten were down.
That happened during a difficult stretch for Nigerian equities generally. Business Elites Africa previously reported that the NGX lost about ₦5.9 trillion in market capitalisation over two weeks in August as investors sold several heavyweight stocks.
That broader correction helps explain some of the pressure on equity-linked ETFs, although the scale of individual ETF price movements still has to be read alongside liquidity.
Trading slowed as prices fell
Investors were also doing less business in the ETF market.
About 9.81 million ETF units changed hands during August, down 23% from 12.74 million in July.
The value of those transactions fell more moderately, from ₦2.39 billion to ₦2.10 billion, a decline of 12.3%.
Stanbic IBTC ETF 30 accounted for the largest value of trades at roughly ₦1.02 billion despite only 515,905 units changing hands. SIAML Pension ETF 40 followed with ₦289.2 million, while Vetiva Griffin 30 recorded ₦175.62 million.
By volume, Vetiva Banking ETF dominated with 5.12 million units.
NewGold sat at the other end. Only 1,599 units were traded during the month, although its high unit price still produced transaction value of ₦162.64 million.
The liquidity numbers are more than a side detail. In a market where relatively few ETF units may trade on a given day, a transaction involving a small number of units can shift the quoted market price far more than investors accustomed to heavily traded international ETFs might expect.
That complicates the simple conclusion that August represented a wholesale rejection of passive investing.
SIAML remains an equity-heavy pension index fund
SIAML Pension ETF 40 was launched in January 2017 and tracks the NGX Pension Index. Its portfolio is concentrated in pension-eligible Nigerian equities rather than government bonds or cash-like instruments.
Its latest published holdings span banking, telecommunications, industrial goods, consumer companies, energy and other sectors.
That gives the fund broad equity exposure, but broad does not mean low risk. Stanbic IBTC classifies the ETF’s risk profile as very aggressive.
For context, Nigeria’s wider pension industry is far more conservative. Business Elites Africa’s review of how Nigeria’s ₦31.32 trillion pension pool is invested found that more than half of pension assets were held in Federal Government securities as of May.
The SIAML ETF therefore represents a much narrower slice of the investment universe: listed equities that satisfy pension investment criteria.
For investors looking at August’s 43.86% headline loss, that context is important.
The fund had a bad month on the exchange. So did most NGX-listed ETFs.
But the more useful question is not simply how far the quoted price fell. It is how closely that price reflected the value of the portfolio underneath it, particularly in a market where trading can be thin.
September’s trading will show whether those gaps narrow or whether liquidity continues to produce unusually large swings in quoted ETF prices.
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