Nigeria’s exit from S&P index leaves investors nursing losses

Investors in a synthetic ETF lost money after Nigeria was removed from its underlying index. This is because the ETF relies on a swap contract with a counterparty to replicate the performance of the underlying assets, and when Nigeria was removed from the index, the swap contract was terminated at a “zero price.” In contrast, a physical ETF or mutual fund would have been able to sell the Nigerian holdings and plough the proceeds back into the fund.

Link to the original story: https://businessday.ng/business-economy/article/nigerias-sp-index-exit-leaves-investors-nursing-losses/