This gives investors a new way to tap into the country’s strong-performing banking sector through a single investment.
The approval brings the number of ETFs listed on the Nairobi Securities Exchange (NSE) to three.
This marks a significant milestone for the local market as the WSA Banking ETF will be the first ETF domiciled in Kenya and focused on locally listed firms.
The fund, promoted by Wallstreet Africa Group, the financial media and fintech company behind the Kenyan Wall Street, is expected to list on the NSE in the fourth quarter.
The CMA board approved the product under its 2015 Policy Guidance Note on Exchange Traded Funds, as the regulator seeks to widen the range of investment products available to local investors and deepen the capital markets.
The authority’s chief executive, Wyckliffe Shamiah, said the product was aligned with the regulator’s ambition of encouraging innovation in the capital markets while giving investors more opportunities to diversify their portfolios.
“The rollout of the innovative ETF product by the Wallstreet Africa Group is aligned to our ambition of facilitating curation of innovative products in the capital markets space,” Shamiah said.
The timing of the fund comes as banking stocks lead a powerful rally on the Nairobi bourse.
The NSE Banking Index gained 30.9 per cent by June and has risen 62 per cent since October 2025, indicating that the surge has extended beyond a handful of large lenders.
The broader NSE market has also strengthened, gaining 33 per cent in the 12 months to June 2026, with total market capitalisation hitting about Sh4 trillion in the first week of August.
Individual banking stocks have been among the biggest beneficiaries with I&M Group gaining 60.6 per cent this year, followed by Stanbic Holdings at 47.5 per cent and Co-operative Bank at 46.1 per cent..
The sector’s heavyweight lenders also command significant valuations, with Equity Group valued at about Sh327.4 billion, KCB Group at Sh257.1 billion and Co-operative Bank at Sh204.8 billion.
The new ETF offers investors a way of spreading their exposure across the sector instead of betting on the performance of a single bank.
The fund will track the NSE Banking Index, investing in its constituent companies.
These include Equity Group, KCB Group, Co-operative Bank, Absa Bank Kenya, NCBA Group, Standard Chartered Bank Kenya, Stanbic Holdings, I&M Group, Diamond Trust Bank, HF Group and BK Group.
This arrangement will see an investor buy ETF units on the NSE much like purchasing a listed share.
The value of those units will then move in line with the performance of the underlying banking stocks.
Wallstreet Africa founder Erick Asuma said the company is targeting up to Sh7 billion in committed capital at launch, with retail investors expected to form an important part of the fund’s investor base over time.
Tradiam Asset Managers will serve as fund manager, while the ETF will operate as an open-ended scheme, with its units traded on the NSE.
Market makers or authorised participants may also support liquidity by facilitating the creation and redemption of units.
The WSA Banking ETF will join the Absa NewGold ETF, which tracks physical gold, and the Satrix MSCI World Feeder ETF, which provides exposure to global developed-market equities.
