The Nairobi Securities Exchange (NSE) plans to launch East Africa’s first AI-focused ETF, giving local investors easier access to global companies driving artificial intelligence innovation. The proposed exchange-traded fund (ETF) forms part of the exchange’s strategy to expand investment products, attract younger investors, and strengthen Kenya capital markets through financial innovation.
Key Overview
The proposed AI-focused ETF will track a basket of companies with significant exposure to artificial intelligence, allowing investors to participate in one of the world’s fastest-growing technology sectors through a locally traded investment product. The initiative supports the NSE’s long-term goal of expanding thematic investing and modernizing Kenya’s capital markets.
NSE Plans East Africa’s First AI-Focused ETF
The Nairobi Securities Exchange (NSE) is preparing to launch East Africa’s first AI-focused ETF, marking a significant milestone in the evolution of Kenya’s investment landscape.
According to NSE Chief Executive Frank Mwiti, the exchange intends to introduce the fund before the end of the year, subject to regulatory approval. The ETF would provide investors with exposure to companies that are directly involved in the rapidly expanding artificial intelligence industry through a single, locally traded investment product.
The initiative demonstrates the exchange’s commitment to broadening investment opportunities while positioning Kenya as a regional leader in financial innovation.
Bringing Artificial Intelligence Investing to Kenya
The proposed exchange-traded fund (ETF) is designed to track a basket of companies that have meaningful exposure to artificial intelligence technologies.
Speaking about the project, NSE Chief Executive Frank Mwiti said the exchange wants to create a product whose underlying holdings reflect businesses actively participating in AI development. Companies such as Microsoft, Anthropic, and OpenAI could serve as reference companies when constructing the investment portfolio.
Although Kenyan investors can already access AI-related investments through international markets, the NSE believes a locally listed ETF will make investing more convenient, affordable, and accessible.
Meeting Demand from Younger Investors
One of the main drivers behind the proposed AI-focused ETF is changing investor preferences.
According to Mwiti, younger investors are increasingly interested in high-growth technology sectors rather than traditional industries such as manufacturing, banking, or cement production. The exchange has observed growing demand for investment products linked to emerging technologies, particularly artificial intelligence.
This shift reflects broader global investment trends, where thematic investing has gained popularity as investors seek exposure to long-term structural changes shaping the global economy.
By listing the ETF locally, the NSE hopes to attract a new generation of retail investors to Kenya’s capital markets.
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M-Pesa Expands Retail Investor Participation
The exchange’s confidence in launching new investment products has been strengthened by the rapid growth in retail participation.
Safaricom’s integration of share trading into the M-Pesa platform earlier this year significantly expanded access to the stock market. According to Mwiti, the service attracted approximately one million new investors, many of whom were participating in the capital markets for the first time.
The increase in retail participation demonstrates the growing appetite for accessible investment opportunities delivered through digital platforms.
Combined with rising financial literacy and mobile technology adoption, this creates a favourable environment for innovative investment products such as thematic ETFs.
Strong Market Conditions Support New Products
Kenya’s equity market has performed strongly throughout the year, providing additional momentum for new investment offerings.
The equities market has rallied by more than 30 percent, supported by robust corporate earnings, stable inflation, and a relatively stable currency. These conditions have pushed the value of listed equities to a record KSh4 trillion, with the NSE expecting total market capitalization to reach KSh5 trillion before year-end.
A growing market, coupled with increasing investor participation, provides a solid foundation for expanding the exchange’s product portfolio.
Part of the NSE’s Long-Term Strategy
The AI-focused ETF forms part of the Nairobi Securities Exchange’s broader 2025-2029 strategic plan.
The exchange aims to introduce approximately 50 new investment funds over the strategy period as it seeks to diversify beyond traditional equities and bonds.
Despite operating for decades, the NSE has listed only two ETFs to date:
The Barclays NewGold ETF, launched in 2017, and the Satrix MSCI World Feeder ETF, introduced in 2025.
The artificial intelligence fund would therefore represent an important milestone in accelerating the exchange’s ETF market and expanding thematic investing opportunities for Kenyan investors.
Cryptocurrency ETF Also Under Consideration
Beyond artificial intelligence, the NSE is also evaluating another innovative investment product.
The exchange is considering launching a cryptocurrency ETF tracking major digital assets such as Bitcoin, Ethereum, and Solana. However, that product is expected to follow only after Kenya finalizes legislation governing digital assets and cryptocurrency markets.
Together, the AI-focused ETF and the proposed cryptocurrency ETF reflect the exchange’s intention to modernize its investment offerings while responding to evolving investor preferences.
Regional Leadership in Financial Innovation
While South Africa’s Johannesburg Stock Exchange listed an AI-focused ETF earlier this year, Nairobi’s planned fund would become the first of its kind in East Africa.
This positions the Nairobi Securities Exchange as a regional leader in developing innovative capital market products.
By expanding access to global investment themes through locally listed funds, the exchange hopes to increase participation, deepen liquidity, and enhance the competitiveness of Kenya’s financial markets within Africa.
Outlook
The proposed AI-focused ETF represents more than just another listed fund. It signals the Nairobi Securities Exchange’s ambition to modernize Kenya capital markets, attract younger investors, and broaden access to global investment opportunities through locally traded products.
If approved by regulators, the ETF could become a landmark product for East Africa, opening the door for additional thematic funds focused on emerging technologies, clean energy, cybersecurity, healthcare innovation, and other long-term global investment trends.
FAQs
What is the proposed AI-focused ETF?
The proposed AI-focused ETF is an exchange-traded fund (ETF) that will invest in a basket of companies with significant exposure to artificial intelligence, allowing investors to gain diversified exposure through a single listed product.
Why is the NSE launching an AI ETF?
The Nairobi Securities Exchange (NSE) aims to expand its range of investment products, attract younger investors, increase market participation, and strengthen Kenya capital markets through financial innovation.
Which companies could be included in the ETF?
According to NSE Chief Executive Frank Mwiti, companies such as Microsoft, Anthropic, and OpenAI could serve as reference companies for the ETF, although the final portfolio will depend on the fund’s approved structure.
Will the AI-focused ETF be the first in Africa?
No. South Africa’s Johannesburg Stock Exchange already lists an AI-focused ETF. However, the proposed NSE product would become East Africa’s first AI-focused ETF, making it a regional milestone in thematic investing.
Sources: Cnbc, iAfrica, News Ghana, Business Day
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