Kenya’s first locally made ETF will let you buy 11 banks in one trade

The Capital Markets Authority approved a new investment product on 11 August 2026 that will let an ordinary investor own a piece of every bank listed in Nairobi through a single purchase.

The product is called the WSA Banking Index ETF. It is issued by Wallstreet Africa Group Limited, the company behind the financial news site Kenyan Wall Street, and Tradiam Asset Managers Limited will run it as fund manager. CMA cleared it under the Capital Markets Policy Guidance Note on Exchange Traded Funds, 2015, and published the approval on 11 August.

Two things make this different from the products already on the exchange. It will be the third exchange traded fund listed in Nairobi, and the first one created and domiciled in Kenya. The two that already trade there, the Absa NewGold ETF and the Satrix MSCI World Feeder ETF, are South African funds domiciled at the Johannesburg Stock Exchange.

What’s an ETF

An exchange traded fund is a pot of money that buys a fixed list of shares, then slices itself into units you can buy and sell on the stock exchange like any ordinary share. You buy the units through a stockbroker, using the same CDS account you would use for Safaricom or KCB shares.

The WSA fund is an index fund, which means nobody at Tradiam is picking winners. The fund buys the shares in the NSE Banking Index in roughly the proportions the index says, and the unit price rises and falls with those shares. CMA’s release says the fund will replicate the index “as closely as practicable” by putting all its assets into the constituent shares.

It is also open-ended. New units can be created and existing ones cancelled as demand moves, rather than the fund having a fixed number of units from day one.

The 11 banks in the basket

The fund tracks the NSE Banking Sector Index, which the exchange launched on 1 October 2025. That index is market capitalisation weighted and float adjusted, so bigger banks carry more of it, and only shares actually available to trade are counted.

The 11 constituents are Equity Group, KCB Group, Co-operative Bank, Absa Bank Kenya, NCBA Group, Standard Chartered Bank Kenya, Stanbic Holdings, I&M Group, Diamond Trust Bank, HF Group and BK Group.

Because the weighting follows market value, the fund will lean heavily on the largest three. At the 10 August close, Equity Group was worth KES 324.54 billion, KCB Group KES 272.34 billion and Co-operative Bank KES 215.33 billion, according to data compiled by Kenyan Wall Street. HFCB Group, the smallest constituent, was worth KES 24.51 billion. An investor buying the ETF is buying mostly Equity, KCB and Co-op, with the smaller lenders as a garnish.

Family Bank is missing from the list. It listed on the NSE on 23 June 2026 and index rules require six months of trading before a counter can be considered, which puts its earliest eligibility around late December 2026.

Why banks, and why now

Listed banks are worth about KES 1.64 trillion between them, roughly 41 percent of the whole Nairobi exchange, ahead of telecommunications at about KES 1.43 trillion. The 11 banks in the index made a combined KES 287.73 billion in profit after tax in 2025, up 17.3 percent from KES 245.38 billion in 2024.

The share prices have followed. The NSE Banking Sector Index has gained 62 percent since it launched in October 2025, and returned 30.9 percent in 2026 through the end of July. I&M Group is up about 60 percent this year, and we covered I&M’s first quarter results in May, where profit after tax rose 19 percent to KES 5 billion.

Eric Asuma, who founded Wallstreet Africa Group, told TechCabal the company is targeting KES 5 billion to KES 7 billion in committed capital at launch, and expects retail investors to make up most of the holders over time.

What has not been decided yet

The fund is not open for subscription and you cannot buy it today. It still needs NSE approval before it can list.

There is no listing price. Eric Ruenji, chief executive of Tradiam Asset Managers, told Business Daily the price has not been set because the process is unfinished, and said the intention is to list in mid-October. CMA and Wall Street Africa both put the listing in the fourth quarter of 2026.

There is also no published management fee. Neither the CMA release nor any statement from the issuer gives an annual charge, and the fee is the single number that determines how much of the index return an investor actually keeps over the years. Both numbers should appear in the information memorandum the issuer has said it will publish before listing.

The trade-off to understand before you buy

Holding 11 banks instead of one means a bad year at any single lender gets diluted by the other ten. It also means you give up the gain from correctly picking the one bank that beats the rest.

The deeper limit is that this is a sector fund, not a diversified one. All 11 counters are Kenyan banks exposed to the same Central Bank of Kenya rate cycle, the same domestic credit conditions and the same tax and regulatory decisions. If Kenyan banking has a bad year, every holding has a bad year together. Ownership shifts matter too. NCBA is being acquired by South Africa’s Nedbank, a deal we covered in our coverage of NCBA’s 2025 results, and the group will stay listed with 34 percent of shares trading publicly.

Will you be able to sell it?

The other question is liquidity, which is a plain way of asking whether there will be a buyer on the day you want your money back.

An ETF unit has two prices. The first is what the bank shares inside the fund are worth, divided by the number of units in issue. That is the honest value of one unit. The second is what somebody on the NSE will actually pay you this morning. When a fund trades well, those two numbers sit almost on top of each other. When it does not, they drift apart.

Say the shares inside the fund value your units at KES 22 each. If the order book is thin, the best offer on screen might be KES 19.50, and your choice is to accept that or wait. The 11 banks did nothing wrong. There was simply nobody there to buy.

The usual fix is a market maker, a firm paid to quote both a buy price and a sell price all day so there is always somebody on the other side of your trade. The CMA release says liquidity may be supported by appointed market makers or authorised participants. It does not name any.

This matters more for an ETF than for a unit trust. If you hold a money market fund and want out, you send a redemption instruction to the manager and get paid the fund’s own valuation, even if it takes a few days. With an ETF you have the open market and nothing else.

Kenya’s record with new listed investment products is mixed. ILAM Fahari, the country’s first listed REIT, listed at KES 20 a unit in 2015 and now trades near KES 6, as we set out when Two Rivers opened its dollar REIT in May. That is a different product with different mechanics, but it is the reason to read the fee schedule rather than the press release.

Two things to watch. The information memorandum, which should carry the annual fee and the listing price. And the NSE approval, without which the mid-October date moves.