Investing in Nigerian Equities through the MSCI Index

Many people have asked me questions about investing in Nigerian stocks, which I’m not always able to answer for the simple fact that I don’t invest much in Nigerian equities myself. The reasons are too many, but mostly revolve around the fact that I’m not in Nigeria at the moment. Usually, I suggest they reach out to @nairametrics who do a great job of following up on Nigerian stocks and other happenings within the country’s business space. However, there are some people based here in the US who want something practical and easy for them to buy into from right here. I discovered a potential solution for those people: the MSCI Nigerian index.

MSCI is a US based provider of equity, fixed income and other forms of stock market indexing solutions. In 2002, they published their Nigerian index, made up of about 16 stocks that represent about $10bn in market cap of the relatively largest stocks out of 185 total. You can buy the Index like you would any other ETF or index fund through your financial adviser, global x funds or directly from MSCI.

Performance wise, as you’d expect, the returns have been a disaster in the last few years. However, over the life of the fund, the annualized return is still around 6% which is more than you can say for a lot of the investment opportunities available states side.

Regardless of all that, I’ll always say what I have about Nigerian equities. Tread carefully, and always be ready to get out.

 

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