The African Development Bank (AfDB) and MCB Group launched the African Domestic Bond Fund (ADBF) today at the Hennessy Park Hotel, Mauritius on Monday 10th September 2018. The Fund, which will be listed on the Stock Exchange of Mauritius Ltd on September 18th, 2018, is the first multijurisdictional fixed income Exchange Traded Fund (ETF) on the continent.
ADBF aims at encouraging bond issuances in local currencies by giving investors access to local African fixed income markets through a publicly listed and cost effective vehicle. The ADBF was conceived as part of the AfDB’s African Financial Markets Initiative (AFMI), which aims to strengthen African economies by reducing their dependency on foreign currency denominated debt, increasing the range of available financing options and acting as a catalyst for regional market integration. AfDB is acting as an anchor investor of ADBF to which it has committed USD 25 million.
The ADBF will aim to track the performance of the AfDB/AFMISM Bloomberg® African Bond Index 25% Capped, an index that comprises of African local currency sovereign bonds of eight African markets, namely 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 over time.
MCB Investment Management Co Ltd (MCBIM), a subsidiary of MCB Capital Markets, has been appointed as Fund Manager for the ADBF. MCBIM pioneered investing in the pan African fixed income asset class since early 2014 when it launched the MCB Africa Bond Fund, an actively managed mutual fund focused on African fixed income. This fund has consistently outperformed its benchmark since inception.
Source: MCB Group