KARACHI: A gong ceremony took place at the Pakistan Stock Exchange (PSX) on Monday to mark the official launch of Alfalah Consumer Index Exchange-Traded Fund (ACI-ETF), which is the sixth such fund to be traded on the national bourse.

Each ETF represents a basket of companies and is traded on the exchange like a single stock.

The exchange-traded fund will track the Alfalah Consumer Index, which is a benchmark consisting of 20 stocks from seven sectors that happen to be direct beneficiaries of growing consumer demand in the country.

Speaking on the occasion, Alfalah GHP Investment Management Ltd Chief executive Officer Nabeel Malik said the exchange-traded fund focuses on growing consumer demand, which is expected to strengthen in the wake of economic recovery and sustained GDP growth.

Strong local demand has always led to GDP growth in Pakistan due to favourable demographics as the young population drives consumption in the economy, he said.

This exchange-traded fund will provide investors with a concentrated avenue to benefit from rising consumer demand, Mr Malik added.

The consumer-oriented sectors represented in the Alfalah Consumer Index Exchange-Traded Fund are cement (four companies), engineering (four companies), textile composite (four companies), auto assembling (two companies), food and personal care (two companies), oil and gas marketing (two companies) and pharmaceutical (two companies).

The index will rebalance every six months to include top companies with the highest free float–based market capitalisation in each of the seven sectors. In addition, it’ll include stocks with a one-year daily average trading volume of 100,000 shares or above.

Investors will be able to buy and sell the basket of 20 companies in a lot size of 500 units carrying the face value of Rs10 each.

Addressing the ceremony, Pakistan Stock Exchange Managing Director Farrukh H Khan said the ACI-ETF is a valuable addition to the ETF sector on the bourse and will attract retail and institutional investors.

Mr Khan called on the brokers and asset management companies to educate their customers about exchange-traded funds because the product is both cost-effective and simple.

ACI-ETF gained 0.5 per cent value to close at Rs10.05 a unit on Monday.

Published in Dawn, January 18th, 2022