Step-by-Step Guide to Investing in Exchange Traded Funds (ETFs) in Africa

Exchange Traded Funds (ETFs) are a smart way to grow your money without needing to be an expert in the stock market. In this guide, you will learn everything you need to know about how to invest in ETFs in Africa—whether you’re in Nigeria, South Africa, or Kenya.

This article uses simple English, real-life examples, and clear steps so that students, new investors, and working-class Africans can start confidently. You’ll learn:

• What ETFs are

• How they work

• Why they’re a good choice

• How to invest in them step-by-step

• Tools and platforms to use

• Common mistakes to avoid

• Country-specific ETF tips

• FAQs

Let’s begin your journey into ETF investing in Africa.

What Is an ETF?

An ETF (Exchange Traded Fund) is like a basket that holds many investments inside it—like stocks, bonds, or commodities. When you buy one ETF, you are buying small pieces of all the investments in that basket.

For example, if an ETF tracks the Top 40 stocks in South Africa, buying that ETF means you own a bit of all 40 companies—without buying them one by one.

Key Terms Explained Simply

• Exchange-Traded: You can buy or sell it on a stock exchange like you would a regular stock.

• Fund: It’s a group of investments managed together.

• Diversification: You spread your risk because you’re not putting all your money in one company.

Why Invest in ETFs in Africa?

Benefits of ETFs for Africans

ETFs are growing fast in Nigeria, South Africa, and Kenya. Here’s why:

Why They’re Better Than Many Traditional Investments

Compared to real estate, fixed deposits, or individual stocks, ETFs often offer:

• Better returns over time

• More flexibility

• Lower entry capital (you can start small)

Types of ETFs Available in Africa

Popular ETF Categories You Can Invest In

Knowing the types of ETFs helps you choose the one that fits your goal.

1. Stock ETFs

These follow the performance of a group of stocks. Example:

• Satrix Top 40 ETF (South Africa) – tracks the top 40 companies on the JSE.

2. Bond ETFs

Invest in government or corporate bonds. These are more stable and give regular income.

• Example: ABSA NewFunds GOVI ETF

3. Commodity ETFs

Track the price of things like gold, oil, or agriculture.

• Example: 1nvest Gold ETF or NewGold ETF

4. Sector ETFs

Focus on specific industries like banking, tech, or agriculture.

5. International ETFs

Let you invest in global markets from Africa. Example:

• Satrix MSCI World ETF – lets South Africans invest in top global companies.

6. Shariah-Compliant ETFs

Follow Islamic finance principles. Example:

• STX Shariah Top 40 ETF (South Africa)

Step-by-Step Guide to Investing in ETFs in Africa

How to Start Investing in ETFs (Complete Beginner’s Guide)

This is the heart of the guide: clear steps to begin your ETF journey.

Step 1: Learn the Basics of ETF Investing

Before putting in money:

• Understand how ETFs work

• Know the risks (prices go up and down)

• Understand your goal: long-term growth? Income? Safety?

Tip: Watch YouTube videos, read beginner blogs, or talk to financial educators.

Step 2: Choose Your Investment Platform or Broker

You need a stockbroker or investment app that offers ETF access.

For South Africans:

• EasyEquities

• FNB, ABSA, Standard Bank Securities

• SatrixNow

For Nigerians:

• Chaka

• Bamboo

• Trove

• Risevest (for global ETFs)

For Kenyans:

• NSE via brokers (e.g., AIB Capital, Faida)

• Hisa App

• EFG Hermes Kenya

Choose one with:

• Low fees

• Good mobile app

• Easy onboarding

• Regulated by local authorities

Step 3: Open an Investment Account

Most platforms allow you to open accounts online in minutes.

You’ll need:

• National ID/passport

• Email and phone number

• Bank account

• Proof of address (some platforms)

Step 4: Fund Your Account

Transfer money using:

• Bank transfer

• Card payments

• Mobile money (e.g., M-Pesa, Opay)

Minimum Investment: Some platforms allow starting from ₦1,000 or R10.

Step 5: Pick an ETF to Invest In

Here’s what to consider when choosing:

Example: If you’re in Nigeria and want global exposure, pick Risevest S&P 500 ETF. If in South Africa, go for Satrix Top 40.

Step 6: Make Your First Investment

• Search the ETF name on your platform

• Click “Buy”

• Enter amount

• Confirm

Done! You’re now an ETF investor.

Step 7: Monitor and Grow Your Portfolio

• Check your account monthly or quarterly

• Reinvest dividends if possible

• Add money regularly (monthly plans are great)

Mistakes to Avoid When Investing in ETFs in Africa

Common ETF Mistakes for Beginners

1. Buying without understanding
   Always know what the ETF holds.

2. Investing money you need soon
   ETFs are better for long-term growth (3–5 years+).

3. Following hype
   Don’t chase “hot” ETFs. Stick to your goals.

4. Ignoring fees
   Even low-cost ETFs can eat into profit if you don’t compare.

5. Selling too quickly during market drops
   Hold on—markets recover over time.

Summary Table: ETF Investing in Africa at a Glance

ETF Investing by Country: Nigeria, South Africa, Kenya

Where to Buy ETFs in Nigeria

• Trove App: Access to global ETFs like Vanguard S&P 500

• Chaka / Bamboo: Invest in US-listed ETFs from Nigeria

• NGX ETFs: Access local Nigerian ETFs like Vetiva ETFs (e.g., Vetiva Griffin 30 ETF)

ETFs in South Africa

• Most Active ETF Market in Africa

• JSE-listed ETFs: Satrix Top 40, NewGold, Ashburton, CoreShares

• EasyEquities is the most beginner-friendly platform

Kenya ETF Access

• Still growing slowly

• NSE has ABSA NewGold ETF

• Apps like Hisa and brokers like AIB give access

Frequently Asked Questions

1: How much money do I need to start investing in ETFs?

You can start with as little as ₦1,000, R10, or KES 500, depending on the platform.

2: Are ETFs safe?

ETFs are relatively safe compared to single stocks because they spread risk. But prices still go up and down, so they’re not 100% risk-free.

3: Can I lose money with ETFs?

Yes. If the overall market goes down, the ETF’s value may drop. But long-term investors usually recover and profit.

4: Are ETFs better than stocks?

ETFs are easier and safer for beginners because they offer diversification. Stocks can give bigger gains but also bigger losses.

5: How do I make money from ETFs?

• Price increase: ETF value grows over time

• Dividends: Some ETFs pay out part of the profit from the companies inside

6: How often should I invest?

Monthly or quarterly investing is best. You can use auto-debit features on apps to make it consistent.

7: What happens if my ETF loses value?

If it drops temporarily, wait. The market may bounce back. Don’t panic sell.

8: Are ETF investments taxed?

Yes. In most countries, you may pay capital gains tax and dividend tax. Check local tax laws or consult an advisor.

9: Can I invest in foreign ETFs from Africa?

Yes. Apps like Chaka, Risevest, Trove, and Hisa allow you to buy US or global ETFs from Nigeria or Kenya.

10: What are the best ETFs for beginners in Africa?

• Satrix Top 40 ETF (South Africa)

• Vetiva Griffin 30 ETF (Nigeria)

• ABSA NewGold ETF (Kenya/South Africa)

• Satrix MSCI World ETF (Global exposure)

11: Can students invest in ETFs?

Yes! As long as you’re 18+ and have an ID and bank account, you can start. Even small monthly amounts make a big difference over time.

12: Can I sell my ETF anytime?

Yes. ETFs are liquid. You can sell them on trading days just like normal shares.

Conclusion: Start Your ETF Journey Today

Investing in ETFs in Africa is one of the easiest, cheapest, and smartest ways to grow wealth. Whether you’re in Nigeria, Kenya, or South Africa, you can begin with little money and zero experience.

Here’s a quick reminder:

• Learn the basics

• Choose the right platform (Chaka, EasyEquities, Trove, Hisa)

• Pick the right ETF (based on your goals)

• Start small but stay consistent

• Avoid panic, stay long-term