Gold and global stocks lift NSE funds return up to 24pc
Two funds that allow investors to buy gold and top global firms like Nvidia, JPMorgan Chase, and Apple at the Nairobi bourse have made returns of up to 24 percent in the past year.
The Exchange Traded Funds (ETFs) traded at the Nairobi Securities Exchange (NSE) has benefited from volatile global markets despite underperforming the rest of the local equities market.
The two listed funds, the Absa NewGold EFT and the Sanlam-owned Satrix MSCI World ETF, which have their primary listing on the Johannesburg Stock Exchange, expose local investors to global assets.
The Satrix ETF was cross-listed at the NSE 12 months ago at an introductory price of Sh761 per unit, and is now trading at Sh941.
The Absa NewGold ETF is now trading at Sh4,945 per unit, compared to Sh4,080 in July 2025.
In that period, investor wealth or market capitalisation at the NSE has appreciated by 55 percent or Sh1.41 trillion to Sh3.954 trillion.
The bourse has been boosted by gains of between 40 and 100 percent on blue chip stocks such as Safaricom, Equity Group, KCB Group, and Co-operative Bank of Kenya.
Rising demand for shares by local investors, including fund managers, has driven the equities gains, allowing them to outperform the alternatives such as bonds, real estate and ETFs.
The two ETFs, however provide access to global assets for local investors, allowing them to diversify their portfolios and hedge against losses in case of the shilling weakening against the dollar.
An ETF is an investment instrument of fund that holds underlying assets, in which investors can buy and sell units, much like they do with ordinary equities. ETFs can be structured to track a wide array of assets, including commodities, currencies, indices or a collection of stocks.
The Satrix MSCI World ETF captures over 1,300 large and mid-size cap stocks across 23 developed market countries, including the US, the UK, Japan, Switzerland and Germany.
The companies included in the fund all comply with size, liquidity and free float criteria of the closely watched MSCI World Index, whose top constituents comprise global giants such as Apple, Nvidia, Microsoft, Amazon, Meta, JPMorgan Chase and Alphabet, Google’s parent company.
The Satrix ETF rose to touch its all-time high price of Sh948 per unit earlier this month, underlining the improved prices of the global stocks.
A number of the US blue chips have gained on the back of capital flight to the world’s largest economy due to the geopolitical risk caused by the war in the Middle East.
“Despite experiencing the direct effects of heightened geopolitical tensions in the Middle East during the second quarter of 2026, global equity markets demonstrated remarkable resilience, recording their strongest quarterly performance in six years,” noted the Capital markets Authority (CMA) in its second quarter 2026 market soundness report published on Thursday.
“According to the MSCI World Index, global equities delivered a positive return of 13.9 percent during the quarter, representing a significant recovery from the 3.47 percent decline recorded in the preceding quarter.”
The Absa NewGold ETF, which was listed on the NSE in March 2017, is a gold derivative fund whose price in the local market is linked to the real-world price of the precious metal.
In the last one year, the war in the Middle East has caused the price of gold to rise as investors sought the metal as a hedge against inflationary losses.
A succession of global economic shocks in recent years such as the Covid-19 pandemic, the Russia –Ukraine war, the Middle East conflict between Israel and Hamas and the US tariffs on imports have led to a steady appreciation in the value of gold, and underlying assets such as the Absa NewGold ETF.
The ETF hit its highest ever price of Sh6,800 in late January, in line with the rise in the price of gold to $5,328 per troy ounce.
The stability of the shilling at Sh129 to the dollar has meant that he ETF has not made and exchange gain or loss this year when translating to the local currency, tying its gain neatly to that of gold in the market.
After holding at the elevated levels through to March, the price of gold has eased back to about $4,017 per ounce after the US and Iran agreed a ceasefire.
Despite the resumption of airstrikes between the two countries two weeks ago, the price of gold has remained fairly stable this month.
