Nigeria’s exchange-traded fund (ETF) market is entering 2026 with growing momentum, following two consecutive years of strong expansion that underline rising investor confidence and deepening participation in capital market instruments listed on the Nigerian Exchange (NGX).
Data from Securities and Exchange Commission (SEC) valuation reports dated January 3 and December 24, 2025, show that the total net asset value (NAV) of all listed ETFs climbed from ₦12.77 billion in 2024 to ₦18.08 billion in 2025. This growth, recorded across 12 ETFs compared with 11 funds the previous year, represents a 41.7 percent increase in total market value.
Although the average year-to-date yield moderated slightly—from 53 percent in 2024 to 48 percent in 2025—the sharp rise in assets under management signals sustained appetite for ETFs among Nigerian investors seeking diversified exposure to equities and commodities.
ETFs That Defined Market Performance in 2025
A closer look at market composition reveals that a handful of funds accounted for a significant share of total value and returns, reinforcing their strategic relevance going into 2026.
The VG 30 ETF, managed by Vetiva Fund Managers, maintained its dominance in the market, accounting for approximately 43 percent of combined ETF NAV. Over the 2024–2025 period, the fund posted an average yield of 45.12 percent, reflecting both scale and consistent performance.
The Lotus Halal ETF, under the management of Lotus Capital Limited, also delivered notable results. The fund recorded a two-year average yield of 64 percent and maintained a strong NAV base of ₦2 trillion, representing more than 11 percent of total ETF market value.
Meanwhile, the New Gold ETF, managed by New Gold Managers, continued to benefit from strong commodity-linked performance. With an average yield of 88 percent across 2024 and 2025, the fund sustained momentum in 2025, delivering a return of about 60 percent.
Among smaller funds, the VCG ETF, also managed by Vetiva Fund Managers, stood out as the highest-yielding ETF in its category. The fund posted an average return of 83.20 percent across two years, including a standout 118.02 percent yield in 2025.
The Stanbic IBTC ETF 30 Fund, overseen by Stanbic IBTC Asset Management, rounded out the top performers with steady gains, recording a two-year average yield of 41.49 percent.
While several other ETFs delivered respectable outcomes, analysts caution that historical performance should be viewed as an indicator rather than a guarantee of future returns—especially as investors plan for 2026.
Understanding Exchange-Traded Funds
An exchange-traded fund functions as a pooled investment vehicle that holds a collection of assets such as equities, fixed-income instruments, or commodities. By purchasing a single ETF unit, investors gain exposure to a broad basket of underlying securities rather than committing capital to individual assets.
This structure allows for built-in diversification, helping reduce portfolio risk. If one component underperforms, gains from other assets within the fund can help cushion the impact. As a result, ETFs are widely regarded as an efficient and cost-effective way to achieve diversification within a single investment product.
How ETFs Are Traded on the NGX
ETFs listed on the NGX are traded in the same manner as ordinary shares. Investors can buy or sell ETF units through licensed stockbrokers or, in some cases, directly through fund managers.
Entry requirements vary across funds and are typically expressed in units rather than cash value. One of the key advantages of ETFs is their relatively low barrier to entry compared with other pooled investment vehicles.
While some ETFs allow investors to start with as little as one unit, others have higher minimum thresholds. For instance, the Stanbic IBTC ETF 30 Fund requires a minimum subscription of 1,000 units, reflecting its institutional-grade structure.
ETFs Investors May Consider for 2026
Selecting the right ETF depends largely on individual investment objectives, risk tolerance, and time horizon. Based on performance trends from 2024 and 2025, different funds may appeal to different investor profiles as 2026 approaches.
Investors seeking high-growth potential may continue to monitor the New Gold ETF, which saw its NAV rise from ₦1.3 billion in 2024 to ₦2.01 billion in 2025, supported by strong commodity price movements.
Those prioritising size and market stability may look toward the VG 30 ETF, which accounted for over 43 percent of total ETF NAV in 2025. The fund provides exposure to Nigeria’s largest and most liquid companies, making it a strategic option for investors targeting blue-chip equities.
Key Factors to Review Before Investing
Before committing capital to any ETF, market participants are advised to study the fund’s factsheet carefully. This document provides essential insights into how the ETF operates and the risks involved.
Important considerations include the fund’s investment strategy, whether it focuses on equities, bonds, commodities, or a blended approach. Investors should also confirm the minimum investment requirement, assess the fund’s risk profile, and review applicable expense ratios and management fees, as these costs directly affect long-term returns.
Another critical factor is the ETF’s replication method—whether it fully mirrors its benchmark index or uses a sampling technique to track performance.
Outlook for 2026
As Nigeria’s capital market matures, ETFs are increasingly emerging as a flexible and transparent investment option for both retail and institutional investors. With careful evaluation of fund structure, cost, and risk exposure, ETFs can play a strategic role in long-term portfolio construction.
By applying these considerations, investors positioning for 2026 can make more informed decisions and align their ETF selections with broader financial goals.
