Kenya is set to launch its first locally domiciled Exchange Traded Fund (ETF) after the Capital Markets Authority (CMA) approved the WSA Banking Index ETF, giving investors a new avenue to gain exposure to the country’s KSh1.64 trillion listed banking sector.
The ETF, which will be listed on the Nairobi Securities Exchange (NSE), will track the NSE Banking Index and provide diversified exposure to banking stocks through a single exchange-traded investment.
The approval makes the fund the third ETF on the NSE, after the Absa NewGold ETF and Satrix MSCI World Feeder ETF, but the first to be domiciled in Kenya.
The product is being developed by Wall Street Africa Group in partnership with Tradiam Asset Managers and is expected to debut on the NSE’s Main Investment Market Segment in the fourth quarter of 2026, subject to completion of outstanding listing and operational requirements.
The ETF will operate as an open-ended scheme, investing in the banking companies that make up the NSE Banking Index. The structure will allow investors to spread their exposure across multiple banking stocks without having to purchase each counter individually.
CMA Chief Executive Wyckliffe Shamiah said the approval supports efforts to introduce innovative investment products, expand diversification opportunities for investors and deepen Kenya’s capital markets.
Banking Sector Drives NSE’s Market Rally
The ETF is being introduced as Kenyan equities experience a strong rally. The NSE recently surpassed KSh4 trillion in total market capitalisation, less than nine months after crossing the KSh3 trillion mark.
Listed banks account for approximately KSh1.64 trillion, representing about 41% of the exchange’s total market value. This puts banking ahead of telecommunications, which has a combined market value of roughly KSh1.43 trillion.
The banking sector has also recorded strong gains. The NSE Banking Sector Index, launched in October 2025, has risen 62% since inception and delivered a 30.9% return in the first seven months of 2026, outperforming major NSE equity indices and bonds.
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Several banking counters have posted significant gains this year. I&M Holdings has risen by about 60%, followed by Stanbic Holdings at 48%, Co-operative Bank at 46%, BK Group at 41%, while Absa Bank Kenya and Diamond Trust Bank have each gained about 35%.
Banking Profits More Than Triple Over 10 Years
The sector’s strong market performance has been supported by significant growth in earnings.
The 11 banking groups represented in the index recorded a combined KSh287.73 billion in profit after tax in 2025, up 17.3% from KSh245.38 billion in 2024.
Their combined earnings have more than tripled over the past decade, rising from KSh89.42 billion in 2015, representing growth of roughly 222%.
Banking profits also recovered sharply after the 2020 downturn, when combined earnings fell to KSh87.64 billion, before more than tripling over the subsequent five years.
The ETF will initially comprise 11 banking counters: Equity Group, KCB Group, Co-operative Bank of Kenya, Absa Bank Kenya, NCBA Group, Standard Chartered Bank Kenya, Stanbic Holdings, I&M Group, Diamond Trust Bank Kenya, HF Group and BK Group.
Family Bank is not yet eligible for inclusion because it must first record at least six months of trading on the NSE under the index’s eligibility requirements.
Both the ETF and its underlying securities will be denominated in Kenya shillings, meaning investors will not face foreign-exchange exposure from the fund’s underlying holdings.
Market makers and authorised participants will also be able to create and redeem ETF units, helping support liquidity in secondary-market trading.
The fund is not yet open for subscription, with its launch dependent on completion of the remaining regulatory, listing and operational requirements.
