Kenya's Capital Markets Authority (CMA) has approved a new investment fund from Wall Street Africa (WSA), a Nairobi-based financial media and fintech startup, that will enable investors to buy into a basket of listed banks through a single investment vehicle.

The WSA Banking exchange-traded fund (ETF) will hold shares in banks listed on the Nairobi Securities Exchange (NSE). According to the CMA, it will be Kenya's first locally domiciled exchange-traded fund and is expected to list in the fourth quarter of 2026.

The approval arrives as Kenyan bank stocks drive a robust rally in the country's equities market, with the NSE Banking Index up 30.9% year-to-date through July. The new ETF will allow investors to gain exposure to that broader banking rally through a single instrument rather than selecting individual stocks.

WSA founder Erick Asuma told TechCabal that the company is targeting KES 5 billion to KES 7 billion ($38.6 million to $54.1 million) in committed capital at launch, with the fund expected to attract predominantly retail investors over time.

How the ETF Works

An ETF is a fund that holds a collection of investments but trades on a stock exchange like an ordinary share. Rather than deciding how much to allocate across individual local banks, investors can purchase units in the WSA Banking ETF to gain exposure to the entire group with a single transaction.

The WSA fund will track the NSE Banking Index by investing in the constituent bank shares, meaning the value of an investor's units will rise or fall in line with the underlying bank shares. Tradiam Asset Managers, a Kenyan fund management firm, will serve as the fund manager, and investors will trade the ETF units on the NSE.

Purchasing a single bank's shares concentrates exposure to that company's performance, while buying the ETF distributes exposure across the banking sector, so a weak performance by one lender can be partially offset by gains at others. The trade-off is that an investor forgoes some of the upside that could come from selecting a single bank that significantly outperforms its peers.

Kenya's First Locally Domiciled ETF

The product also broadens a small ETF market on the Nairobi Securities Exchange. Two ETFs currently trade on the exchange: the Absa NewGold ETF, which tracks gold, and the Satrix MSCI World Feeder ETF, which provides exposure to global equities.

Unlike those two existing ETFs, which are South African funds, the WSA Banking ETF will be the first on the NSE focused specifically on publicly listed Kenyan companies. Across African exchanges, ETF adoption has been limited outside South Africa, which has the continent's most developed ETF ecosystem with dozens of listed products. Nigeria, despite a larger equity market capitalisation than Kenya's, has only a handful of ETFs. The WSA listing adds to broader efforts by Kenyan regulators to deepen capital markets and widen the range of collective investment vehicles available to domestic savers, who have historically leaned heavily toward real estate, government securities, and bank deposits.

The launch coincides with bank stocks leading a rally across Kenyan equities. According to NSE data compiled by WSA, the banking index has gained 62% since October 2025, indicating that the rally extends beyond a few large lenders and has been broad-based across the sector. The Central Bank of Kenya's elevated policy rate, which stood at 10.75% after a series of cuts from a peak of 13.0%, has supported wide net interest margins for lenders, contributing to strong profitability across the sector.

"The banking sector has consistently been one of the best-performing segments of the Exchange and ranked among the world's best performing in terms of return on investment. The WSA Banking ETF gives both local and international investors a simple, transparent and cost-effective way to participate in that growth story," Asuma said.

The market capitalisation of the major banks illustrates the scale of the sector. Equity Group is valued at KES 327.4 billion ($2.5 billion), KCB Group at KES 257.1 billion ($2.0 billion), and Co-operative Bank at KES 204.8 billion ($1.6 billion).

According to NSE data, I&M Group has posted the largest gain among the larger banks this year at 60.6%, followed by Stanbic Holdings at 47.5% and Co-operative Bank at 46.1%.

The broader stock market has also rallied. The NSE had gained 33% by the end of June, while the exchange's total market value crossed KES 4 trillion ($30.9 billion), less than nine months after surpassing KES 3 trillion ($23.2 billion).

Asuma noted that the ETF will be denominated in Kenyan shillings, and its underlying shares also trade in shillings, meaning investors will not incur foreign exchange exposure through the fund's investments. Its value will nonetheless move with bank share prices and could be influenced by interest rates, bank earnings, regulatory changes, and broader economic conditions.

Wall Street Africa will publish the final information memorandum, subscription timetable, and listing details ahead of the listing.

"The ETF is expected to deepen participation in Kenya's capital markets by providing both local and foreign investors with an innovative and liquid investment instrument," Asuma added.