International Diversification
Looking Beyond Kenya
The NSE represents just a tiny fraction of global stock markets. Diversifying internationally can further reduce risk and open up growth opportunities not available on the Kenyan market.
Why Go International?
- Broader opportunity set — The NSE has about 63 listed companies. The US market alone has over 4,000. Global markets give you access to technology giants, pharmaceutical companies, and other sectors underrepresented on the NSE.
- Currency diversification — Holding assets in USD, EUR, or other currencies protects you if the KES depreciates
- Reduced country risk — Political or economic instability in Kenya affects the NSE disproportionately. International holdings provide a buffer.
- Growth exposure — Emerging market economies in Asia and frontier markets in Africa may grow faster than Kenya in certain periods
East African Community (EAC) Markets
The closest international markets include:
- Uganda Securities Exchange (USE) — Companies like Stanbic Uganda, Umeme, and MTN Uganda
- Dar es Salaam Stock Exchange (DSE) — Tanzania's exchange with companies like CRDB Bank and Tanzania Breweries
- Rwanda Stock Exchange (RSE) — A smaller but growing market
Some NSE-listed companies like Equity Group and KCB have cross-listings on EAC exchanges, providing indirect regional exposure.
Global ETFs and Funds
The easiest way to access global markets is through Exchange-Traded Funds (ETFs) or unit trusts that invest internationally. Some Kenyan fund managers offer USD-denominated funds that invest in global equities and bonds. While there may be minimum investment requirements and additional fees, these vehicles provide instant diversification across hundreds or thousands of international companies.
A practical approach is to keep 70-80% of your portfolio in Kenyan assets you understand well, and allocate 20-30% to international exposure for added diversification.