An ETF is defined as a listed investment product, which tracks the performance of a particular index (e.g. NSE 20, NSE 25) or “basket” of shares, bonds, money market instruments or a single commodity. These are known as underlying securities or assets. ETF are traded on an exchange just like an ordinary share and the price of a particular ETF will be determined by the demand and supply of the ETF. An ETF can be a domestic or offshore product
B. Benefits of exchange traded funds
Parties involved in an ETF issuance
Market Maker -a market maker in Kenya’s ETF market shall play the role of creating liquidity through two-way price quotes in order to eradicate substantial price gaps and ensure a liquid market for all.
Manager – The Fund Manager acts on its behalf for the purpose of managing the ETF or undertake to manage the ETF.
Trustee -A trustee primary responsibility of protecting the interests of investors.
Current Issuances in the market
More information on Exchange Traded Funds:
Exchange Traded Funds at the NSE Policy Guidance Note for Exchange Traded Funds