The African Development Bank (AfDB) and Mauritius Commercial Bank Group (MCB) have launched the African Domestic Bond Fund (ADBF). The pioneer exchange-traded fund (ETF) is accessible to investors through its listing on 18 September on the Stock Exchange of Mauritius.
The ADBF fund will track the performance of the AfDB/AFMI Bloomberg African Bond Index 25%Capped, an index that comprises African local currency sovereign bonds of 8 African markets: Botswana, Egypt, Kenya, Namibia, Nigeria, South Africa, Ghana and Zambia. It is intended that sovereign bonds of other countries will be included in the index in future.
It is the first multi-jurisdictional fixed income exchange-traded fund (ETF) in Africa. The Bank has committed $25 million and is acting as an anchor investor of ADBF. It was listed on Stock Exchange of Mauritius came on 18 September 2018.
Fund Manager is MCB Investment Management (MCBIM), a subsidiary of MCB Capital Markets. MCBIM is a pioneer of the pan-African fixed-income asset class, it launched the MCB Africa Bond Fund, an actively managed mutual fund focused on African fixed income, in 2014. The African Development Bank says the fund has consistently outperformed its benchmark.
The AfDB’s African Financial Markets Initiative (AFMI) aims to strengthen African economies by reducing their dependency on debt denominated in foreign currency (FX), increasing the range of available financing options, and acting as a catalyst for regional market integration.
According to the press release: Pierre-Guy Noel, chief executive officer of MCB Group, said: “We are delighted to partner with the African Development Bank in launching this pioneering fund. This attests to the Bank and MCB’s commitment to help develop the local currency fixed income markets on the continent and to the quality of our investment management capabilities. The fund listing on the Stock Exchange of Mauritius brings to investors the opportunity to access African government bonds conveniently.”
Cédric Achille Mbeng Mezui, Chief African Bond Markets & Coordinator of African Financial Markets Initiative (AFMI), said: “A key milestone has been achieved today with the listing of the first multijurisdictional Sovereign Bond ETF, namely the African Domestic Bond Fund (ADBF) on the Stock Exchange of Mauritius. Next steps: The dual listing on the Nigeria Stock Exchange and increased investment in this Fund.”