NGX, PenCom collaborate to launch Pension Broad Index For Pension Fund Equity Investments

31 July 2023

NGX, PenCom collaborate to launch Pension Broad Index

Nigerian Exchange Limited (“NGX or “The Exchange”), in collaboration with the National Pension Commission (PenCom) is pleased to announce the launch of the NGX Pension Broad Index (NGXPENBRD).

The NGX Pension Broad Index tracks the performance of equity securities that meet the profitability and dividend payment criteria, with no limit or cap on the number of stocks that can be included. The index, which currently includes 88 equities, complies with the Pension Reform Act of 2014 and the Amended Regulation on the Investment of Pension Fund Assets proposed by PenCom.

Speaking on this development, Mr. Jude Chiemeka, Divisional Capital Markets, NGX said, “I commend PenCom for working with us to create the NGX Pension Broad Index, which provides a broader benchmark for equities investment by the pension industry. NGX is very appreciative of PenCom’s demonstration of insightful partnership throughout this process in the interest of the market. With the NGX Pension Broad Index, PFAs now have access to more quality stocks beyond the existing NGX Pension Index, which has its universe capped at 40 stocks. Consequently, the NGX Pension Broad Index would replace the NGX Pension index as the benchmark for the Pension industry in the near future”.

The constituent companies of the NGX Premium Broad Index must have an operating track record of having made taxable profits for at least three out of the five years preceding the investment; and must have paid dividends or issued bonuses at least one out of the five years. In addition, companies to be included must have a Free Float Factor of at least 5% in line with the Exchange's free float rules.

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