African Domestic Bond Fund (ADBF) Exchange Traded Funds (ETF) has listed on the Botswana Stock Exchange (BSE).
African Domestic Bond Fund, domiciled in Mauritius, provides access to local currency African fixed income markets in a cost efficient, liquid and transparent manner. The AfDB acts as an anchor investor and sponsor, with a view to promote local currency finance and contribute to the development of local currency capital markets across the African continent.
The ADBF ETF tracks the performance of the AfDB Bloomberg African Bond Index 25 percent Capped, before fees and expenses and is primary listed on the Stock Exchange of Mauritius denominated in USD and the secondary listing on the BSE will be denominated in BWP. Commenting on this milestone, the BSE CEO, Thapelo Tsheole expressed gratitude to the MCB and AfDB teams for choosing to list this product on the BSE. “This goes to show that our strategic objective of growing the number of instruments and the diversity of our issuer base is bearing fruit. We recognize the hard work and dedication by the various teams involved in this listing across Africa as we welcome this product on the BSE.”
ADBF is a foreign debt securities CIS structured as an Exchange Traded Fund (ETF),which aims to track in a cost-efficient manner the performance of the AfDB/AFMISM Bloomberg® African Bond Index 25 percent Capped (the “Index”) – Ticker BADBC – before fees and expenses, by investing principally in the sovereign bonds of African countries. ADBF’s total return as at 29 July 2022 is 30.8 percent (in USD) and 52.2 percent (in BWP).
Given liquidity considerations and transaction costs, ADBF strategically does not invest in all the bonds but seeks to achieve its investment objective by employing a “stratified sampling” approach to match the Index’s characteristics and returns by investing in a well-diversified portfolio that represents the Index. The Manager endeavors to invest only in the most liquid maturities in each market and adopts an enhanced strategy which allows it to deviate on its country weightings by up to 5 percent from the Index allocations to optimise on liquidity and ensure a smooth operation of the Fund. ADBF may also invest up to 20 percent in Non-Member Securities.