Kenya is set to get its first locally domiciled exchange-traded fund (ETF), giving investors a way to gain exposure to the country’s banking sector through a single investment.
The Capital Markets Authority (CMA) has approved the WSA Banking ETF, a new fund from Wall Street Africa (WSA), a Nairobi-based financial media and fintech company. The fund will invest in shares of banks listed on the Nairobi Securities Exchange (NSE) and is expected to begin trading in the fourth quarter.
The approval comes as Kenyan bank stocks continue to drive a strong rally in the country’s equities market. The NSE Banking Index gained 30.9% in the first seven months of the year, according to market data.
For investors, the ETF offers an alternative to choosing individual bank stocks. Instead of buying shares in one lender, they can buy units in the fund and gain exposure to a basket of banks through a single transaction.
WSA founder Erick Asuma said that the company is targeting between KES 5 billion and KES 7 billion ($38.6 million–$54.1 million) in committed capital at launch. The fund is expected to attract retail investors as participation grows.
An ETF is an investment fund that holds a collection of assets but trades on a stock exchange in much the same way as an individual stock.
The WSA Banking ETF will track the NSE Banking Index by investing in the shares of the banks that make up the index. As those stocks rise or fall, the value of the ETF units will move accordingly.
Tradiam Asset Managers, a Kenyan fund management company, will manage the fund, while the ETF units will trade on the NSE.
The structure also gives investors some diversification. Someone who buys shares in a single bank is heavily exposed to that lender’s performance. With the ETF, that exposure is spread across several banks, meaning weaker performance from one institution could be offset by gains elsewhere in the portfolio.
The trade-off is that investors also give up the potential gains that could come from holding a single bank that significantly outperforms its peers.
The WSA Banking ETF will enter a relatively small ETF market on the NSE.
There are currently two ETFs listed on the exchange: the Absa NewGold ETF, which tracks the price of gold, and the Satrix MSCI World Feeder ETF, which gives investors exposure to global equities.
Both products are South African-domiciled funds. The WSA Banking ETF will be different: it will be locally domiciled and focused on publicly listed Kenyan companies, making it the first ETF of its kind on the NSE.
Its launch also comes at a particularly strong moment for Kenya’s banking stocks.
According to NSE data compiled by WSA, the banking index has gained 62% since October 2025, indicating that the rally has extended across the sector rather than being driven solely by a handful of large lenders.
“The banking sector has consistently been one of the best-performing segments of the Exchange and ranked among the world’s best performing in terms of return on investment,” Asuma said.
He added that the ETF would give local and international investors a “simple, transparent and cost-effective” way to gain exposure to the sector.
The size of Kenya’s major banks highlights the scale of the market the fund is targeting. Equity Group has a market capitalisation of KES 327.4 billion ($2.5 billion), while KCB Group and Co-operative Bank are valued at KES 257.1 billion ($2.0 billion) and KES 204.8 billion ($1.6 billion), respectively.
Among the larger banks, I&M Group has recorded the strongest gain this year, rising 60.6%, according to NSE data. Stanbic Holdings has gained 47.5%, while Co-operative Bank is up 46.1%.
The broader equities market has also been on an upward trajectory. The NSE gained 33% by the end of June, while its total market capitalisation crossed KES 4 trillion ($30.9 billion), less than nine months after passing the KES 3 trillion ($23.2 billion) mark.
The ETF will be denominated in Kenyan shillings, with its underlying shares also traded in shillings. As a result, investors will not have direct foreign-exchange exposure through the fund’s underlying investments.
That does not make the investment risk-free. The ETF’s value will still fluctuate with the performance of the banks in its portfolio and could be influenced by interest rates, bank earnings, regulatory changes and broader economic conditions.
For WSA, the bigger opportunity is to make it easier for more investors to participate in Kenya’s capital markets without having to select and manage individual bank stocks themselves.
The company will publish the fund’s final information memorandum, subscription timetable and listing details ahead of the launch.
Asuma expects the ETF to broaden participation in Kenya’s capital markets by giving both local and international investors access to a new, liquid investment vehicle focused on the country’s banking sector.
