MERVALUE ETF

MERVALUE ETF — the Meristem Value Exchange Traded Fund — is listed on the Nigerian Exchange (NGX) under the ticker MERVALUE. It is managed by Meristem Asset Management Limited and applies a value-style investment approach — targeting Nigerian-listed equities that appear undervalued relative to fundamental measures such as earnings, book value, or dividends. The fund gives investors a single NGX-listed product through which they can gain exposure to a basket of value-screened Nigerian equities without having to select individual stocks themselves.

The fund seeks to provide investors with exposure to the NGX Meristem Value Index — a rules-based basket of Nigerian-listed equities selected on value characteristics such as low price-to-earnings (P/E), low price-to-book (P/B), and high dividend yield.

Value investing is an approach that looks for shares trading at prices below what their underlying business fundamentals suggest they are worth. The idea, associated historically with Benjamin Graham and Warren Buffett, is that markets sometimes misprice companies and that patient investors can benefit by buying those companies while they are overlooked or out of favour.

For MERVALUE specifically, the fund tracks the NGX Meristem Value Index, which screens Nigerian-listed companies using three core criteria: a low Price-to-Earnings (P/E) ratio (the share price is low relative to company profits), a low Price-to-Book (P/B) ratio (the company is trading near or below its net asset value), and a high Dividend Yield (a preference for mature companies that distribute profits to shareholders). The result is a basket of stocks that, at the time of selection, qualify as undervalued by these measures.

Value investing is not the same as low-risk investing. A company can be cheap because the market has identified real problems — deteriorating earnings, regulatory risk, or sector headwinds. The value approach assumes that, on average, the market overreacts to bad news and that buying a diversified basket of undervalued companies will outperform over time, but there are no guarantees.

It is also worth understanding that value and growth strategies tend to rotate in and out of favour. There have been long periods — including the decade following the 2008 global financial crisis — when growth significantly outperformed value. A key principle of value investing is mean reversion — the theory that undervalued stocks will eventually rise toward their intrinsic worth — but this can take years. Nigerian equity markets have their own cycles, and a time horizon of at least 3 to 5 years is generally recommended when investing in a value ETF like MERVALUE.

MERVALUE may be relevant to investors who want equity exposure to the Nigerian market through a value-tilted approach — one that prioritises companies trading at prices that appear low relative to their fundamentals. It may also suit investors who want to compare a value strategy against the growth-focused MERGROWTH ETF before making a style choice.

• Visit the official NGX listing page for MERVALUE, confirm the symbol, and read any fund documents the manager has published.
• Learn what "value investing" means in practice — the style targets undervalued stocks by measures like price-to-earnings or price-to-book, not the fastest-growing companies.
• Compare MERVALUE with MERGROWTH and other NGX ETFs so you understand the style difference before deciding whether value, growth, or a blend fits your plan.

• Value strategies can underperform growth strategies for extended periods — sometimes several years — even when they eventually recover.
• A value-screened basket is still concentrated in Nigerian equities, so it carries country risk, currency risk, and stock market volatility.
• The ETF's underlying holdings can change over time as the fund manager rebalances the portfolio to maintain the value screen.
• Lower-priced stocks are not the same as lower-risk stocks — an "undervalued" company may remain cheap or decline further.
• ETF liquidity on NGX can vary; check recent trading volume before placing a large order through your broker.
• Value stocks can remain undervalued for years, and the market may take a long time to recognise the intrinsic value of the underlying companies, if it does at all.

Meristem Asset Management Limited is the fund manager for MERVALUE. 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 MERVALUE and MERGROWTH, giving investors a paired option across the two dominant equity investment styles.

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

• Core equity holding: MERVALUE can serve as a core Nigerian equity position for investors who want a long-term, passive approach. It provides diversification across banking, industrial, and consumer goods sectors, filtered through a value screen rather than pure market capitalisation.
• Smart beta satellite: In a core-satellite strategy, an investor might hold a broad market index fund as their core and use MERVALUE as a satellite — tilting the portfolio toward undervalued sectors to seek outperformance of the NGX All-Share Index over a 5 to 10 year horizon.

ETF units trade on the NGX like shares. Open a free account, pick Meristem Value 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.