Exchange Traded Funds (ETFs) are becoming one of the smartest ways to invest in Kenya. If you’ve used money market funds or bought stocks before, ETFs offer the perfect middle ground low-cost, professionally managed, and easily accessible.
In this guide, we break down everything you need to know about ETFs in Kenya, and explain how to start investing today using your NSE-approved broker.
What Is an ETF?
An ETF is a basket of different investments (like stocks, bonds, or commodities) bundled into one fund that you can buy or sell on a stock exchange.
In simple terms:
- •Buying an ETF is like buying a mini-portfolio with one click. It lets you diversify your investment without needing to manage each stock individually.
- •In Kenya, ETFs are regulated and traded through the NSE, backed by the Capital Markets Authority (CMA).
How Do ETFs Work in Kenya?
ETFs listed on the Nairobi Securities Exchange are designed to mirror the performance of an underlying asset, index, or commodity. For instance:The ABSA NewGold ETF tracks the price of gold.
When you buy units of an ETF, you own a share of that fun but not the underlying assets directly.
Regulation & Oversight
- •ETFs in Kenya are regulated by CMA.
- •Assets are held in CMA-approved trust structures.
- •ETFs can be traded via apps like Hisa, brokers, or your CDS account.
How ETFs Are Created & Traded in Kenya
Thanks to the CMA framework, ETFs are structured to ensure liquidity, safety, and transparency:
- •ETF Sponsor/Issuer (e.g., ABSA) creates the fund.
- •Authorized Participants (typically institutional traders) assemble the basket of assets and deposit them with a custodian.
- •ETF units are then created and listed on the NSE.
- •Retail investors like you can buy/sell units any time, just like shares.
- •The Net Asset Value (NAV) is updated daily and tracked publicly.
This means ETFs in Kenya operate under a regulated loop of asset creation, trading, and reporting all backed by legal structures.
Benefits of ETFs Based on NSE Guidelines
| Benefit | Why It Matters |
|---|---|
| Diversification | One ETF can hold hundreds of assets, reducing risk. |
| Professional Management | Managed by experts, reported daily by NSE. |
| Liquidity | ETFs can be bought/sold anytime on the NSE. |
| Low Cost | Lower fees than traditional mutual funds. |
| Transparency | Daily reporting, clear NAV calculation, ETF factsheets. |
| Investor Protection | Assets are held in trusts. Even if an issuer fails, your investment remains safe. |
Which ETFs Available on the Nairobi Securities Exchange
Kenya entered the ETF market in 2017 with the listing of the ABSA NewGold ETF, marking a major milestone as the first and only ETF currently available on the Nairobi Securities Exchange (NSE). This introduced a regulated and accessible way for Kenyan investors to gain exposure to global gold prices.
Globally, ETFs have grown into a $10 trillion industry, and while Kenya is still early in its journey, the NSE has laid strong regulatory and structural groundwork to support more ETF products in the future.
Currently Listed: ABSA NewGold ETF
- •Launched: 2017 on NSE
- •Underlying Asset: Physical gold bullion
- •Tracking Index: Global gold spot price
- •Issuer: NewGold Issuer (RF) Ltd., a subsidiary of ABSA Capital
- •Custodian: ICBC Standard Bank
- •Use Case: Ideal for investors looking to hedge against inflation or diversify beyond equities
More info: ABSA NewGold ETF – NSE
As of 2025, the ABSA NewGold ETF is the only ETF listed in Kenya. However, the NSE is actively exploring future listings across different asset classes such as local indices, government bonds, and ESG-aligned funds.
Who Should Invest in ETFs in Kenya?
Here’s how ETFs fit into everyday Kenyan lives:
- •Young professionals: Maybe you’ve just started working, and want to build wealth without the stress of following the stock market every day. ETFs let you invest like a pro with minimal effort.
- •Chamas and SACCOs: You’re managing other people’s money and it’s serious business. With ETFs, you get diversification in one click, and transparency that builds trust.
- •Diaspora investors: You want to support local markets while hedging against volatility. ETFs give you access to Kenya’s growth story plus safe exposure to global assets like gold.
- •Parents and retirees: Safety and steady growth matter more than hype. ETFs are regulated, backed by real assets, and work well for long-term financial planning.
- •If you want to grow your money without betting it all on one horse ETFs are worth a seat at your investment table?
How to Buy ETFs in Kenya
Investing in ETFs on the Nairobi Securities Exchange (NSE) is a straightforward process, designed to be accessible for both new and seasoned investors. Here’s a step-by-step guide:
1. Open a Central Depository System (CDS) Account
To trade on the NSE, you need a CDS account, which holds your securities in electronic form. You can open this account through:
- •Licensed Stockbrokers: Visit a licensed stockbroker or investment bank. A list of licensed trading participants is available on the NSE website.
- •Mobile Trading Platforms: Some platforms, like Hisa, allow you to open a CDS account directly through their app.
You’ll typically need:
- •A copy of your national ID or passport
- •Passport-sized photographs
- •Bank account details
2. Choose a Trading Platform
You can trade ETFs through:
Online Trading Platforms: Many NSE-licensed stockbrokers offer online trading services. A list of these brokers is available on the NSE Mobile and Online Trading page.
Mobile Apps: Apps like Hisa provide user-friendly interfaces for trading ETFs and other securities.
3. Fund Your Account
Deposit funds into your trading account using methods provided by your chosen platform or broker. Common methods include bank transfers and mobile money services like M-Pesa.
4. Select the ETF to Invest In
As of now, the NSE offers the ABSA NewGold ETF, which tracks the price of gold. This ETF is ideal for investors looking to hedge against inflation or diversify their portfolio with commodity exposure. More details can be found on the NSE Exchange Traded Funds page.
5. Place Your Order
Using your chosen platform:
- •Search for the ABSA NewGold ETF.
- •Enter the number of units you wish to purchase.
- •Review the current price and confirm your order.
6. Monitor Your Investment
After purchasing, you can monitor your ETF investment through your trading platform. The NSE provides daily updates on ETF prices and performance, ensuring transparency.
Taxes & Fees
When investing in ETFs on the Nairobi Securities Exchange (NSE), understanding taxes and fees is critical to planning your returns realistically. Let’s break it down.
Capital Gains Tax (CGT)
If you sell your ETF units at a profit, you are required to pay Capital Gains Tax. As of 2025, the CGT rate in Kenya is 15% on the net gain (profit made from the sale).
Example: If you buy ETF units worth KSh 50,000 and later sell them for KSh 60,000, your capital gain is KSh 10,000. You’ll owe 15% of that, which is KSh 1,500.
- •This tax is withheld at the point of sale by your broker and remitted to the Kenya Revenue Authority (KRA).
Dividend Tax
Many ETFs pay out dividends from the returns generated by the underlying assets. However, the only ETF currently listed on the NSE the ABSA NewGold ETF does not pay dividends. Instead, returns are generated through price appreciation as the global gold price rises.
- •If more ETFs are introduced in the future that offer dividends, those would be taxed at 5% (withholding tax) in line with Kenya’s treatment of dividends.
Brokerage Fees
Trading ETFs comes with brokerage and regulatory fees. Here’s what to expect:
| Fee Type | Estimated Range |
|---|---|
| Brokerage Commission | 1.5% – 2% per trade (buy/sell) |
| NSE Transaction Levy | 0.12% |
| CDSC Fee | 0.08% |
| Investor Compensation Fund Levy | 0.003% |
Frequently Asked Questions about ETFs in Kenya
Can I lose money with ETFs?
Yes. Like any market investment, ETF prices can go down. But diversification reduces the risk.
Can I invest via M-Pesa?
Yes, using apps like Hisa.
Do I need a lot of money to start?
No. Some platforms allow investments from as low as KSh 500.
Are ETFs safer than crypto?
ETFs are regulated by CMA, backed by assets, and hosted by the NSE.
