MERGROWTH ETF

MERGROWTH ETF — the Meristem Growth Exchange Traded Fund — is listed on the Nigerian Exchange (NGX) under the ticker MERGROWTH. It is managed by Meristem Asset Management Limited and applies a growth-style investment approach — targeting Nigerian-listed equities with strong revenue and earnings growth trajectories. The fund gives investors a single NGX-listed product through which they can gain exposure to a basket of growth-screened Nigerian equities without having to select individual stocks themselves.

The fund seeks to provide investors with exposure to the NGX Meristem Growth Index — a rules-based basket of Nigerian-listed equities selected on growth characteristics such as strong revenue growth, earnings-per-share (EPS) growth, and reinvestment capacity.

Growth investing is an approach that seeks shares in companies expanding their revenues or earnings significantly faster than the broader market. The idea is that these companies are in high-demand sectors or have strong competitive positions that allow them to keep compounding their business value — and, over time, their share price — even if their current valuation looks expensive by traditional measures.

For MERGROWTH specifically, the fund tracks the NGX Meristem Growth Index, which screens Nigerian-listed companies using growth metrics such as revenue growth rate, earnings-per-share (EPS) growth, and return on equity (ROE). The result is a basket of stocks that, at the time of selection, qualify as growth leaders within the NGX universe. This differs from MERVALUE, which screens for cheapness relative to fundamentals — growth investors are willing to pay a premium for companies expected to keep expanding.

Growth investing carries its own risks that differ from value. Because growth stocks often trade at high price-to-earnings multiples, they are more sensitive to changes in interest rates, market sentiment, or earnings disappointments. A single quarter of missed revenue guidance can trigger a sharp price decline. The approach assumes that, over time, consistent compounders will deliver superior capital appreciation — but there is no guarantee that any individual holding or the basket as a whole will meet those expectations.

Growth and value strategies tend to rotate in and out of favour depending on the economic cycle. Growth has historically outperformed during bull markets and low-interest-rate environments, while value tends to hold up better during downturns or rising-rate cycles. Nigerian equity markets have their own cycles, and the NGX growth landscape includes sectors like banking, consumer goods, and industrials where earnings growth can be tied to macroeconomic conditions such as GDP growth, population trends, and commodity prices. A time horizon of at least 3 to 5 years is generally recommended when investing in a growth ETF like MERGROWTH.

MERGROWTH may be relevant to investors who want equity exposure to the Nigerian market through a growth-tilted approach — one that prioritises companies with strong earnings or revenue expansion. It may also suit investors who want to compare a growth strategy against the value-focused MERVALUE ETF before making a style choice.

• Visit the official NGX listing page for MERGROWTH, confirm the symbol, and read any fund documents the manager has published.
• Learn what "growth investing" means in practice — the style targets companies growing revenue or earnings faster than the market average, not necessarily the cheapest companies.
• Compare MERGROWTH with MERVALUE and other NGX ETFs so you understand the style difference before deciding whether growth, value, or a blend fits your plan.

• Growth strategies can suffer sharp drawdowns when market sentiment turns negative or interest rates rise, as higher-priced growth stocks are more sensitive to valuation reassessment.
• A growth-screened basket is still concentrated in Nigerian equities, so it carries country risk, currency risk, and stock market volatility.
• The ETF's underlying holdings change over time as the fund manager rebalances the portfolio to maintain the growth screen.
• Companies selected for high growth can disappoint — if earnings do not materialise, prices can fall sharply.
• ETF liquidity on NGX can vary; check recent trading volume before placing a large order through your broker.
• Growth stocks can trade at elevated valuations for years but correct quickly, so short-term prices can differ sharply from long-term outcomes.

Meristem Asset Management Limited is the fund manager for MERGROWTH. It was incorporated in 2008 as part of Meristem Securities, a Nigerian capital market conglomerate with over two decades of experience in stockbroking, asset management, and wealth management. Meristem is regulated by the Securities and Exchange Commission (SEC) of Nigeria. Notably, Meristem was the first indigenous Nigerian asset manager to claim compliance with the Global Investment Performance Standards (GIPS) — an internationally recognised framework that signals a strong commitment to transparency and performance reporting integrity. The firm manages both MERGROWTH and MERVALUE, giving investors a paired option across the two dominant equity investment styles.

MERGROWTH and MERVALUE are companion ETFs from the same fund manager, each targeting one of the two dominant equity investment styles. MERGROWTH targets high-revenue, fast-growing companies — typically lower or no dividends (profits reinvested), higher volatility, best suited to bull markets and high-growth cycles. MERVALUE targets undervalued, stable companies — typically higher dividend yields, lower volatility, suited to recovery or stable markets. Neither style is universally superior; some investors hold both to blend the strategies, while others choose based on their market outlook.

• Growth satellite: In a core-satellite strategy, an investor might hold a broad market index fund or MERVALUE as their core and use MERGROWTH as a satellite — tilting the portfolio toward fast-growing companies to seek outperformance during expansion phases of the Nigerian economic cycle.
• Style-blend component: Holding both MERGROWTH and MERVALUE side by side creates a blended style exposure across the NGX. This approach reduces reliance on any single investment style performing consistently, as growth and value typically rotate in their outperformance cycles.

ETF units trade on the NGX like shares. Open a free account, pick Meristem Growth Exchange Traded Fund and an amount from ₦10,000 a month; we buy through a SEC-regulated broker and register the units in your name at the CSCS.