ETFs Ready For Launch

The recent promulgation of Law 03-25 marks a decisive turning point for Morocco’s capital market and the asset management industry. The text indeed paves the way for the introduction of new categories of funds in Morocco, including exchange-traded index funds, commonly known as ETFs (Exchange-Traded Funds).

It is never too late, one might say, to introduce these listed index funds, also called trackers, to the Casablanca Stock Exchange, a project that dates back to 2011 as part of the overall reform of the Moroccan stock market.

Be that as it may, 15 years later, ETFs are now truly in the starting blocks. According to several market sources, they could be launched as early as this year, 2026.

To this end, circulars from the Moroccan Capital Market Authority must be published, including those relating to approval procedures for management companies wishing to launch ETFs, the criteria for selecting indices that may serve as underlying assets, as well as the operational conditions for launch and commercialization.

For Moroccan investors, both individual and institutional, as well as for the asset management sector more broadly, this represents a real small-scale revolution in the making.

As highlighted by BMCE Capital Global Research in an analytical document entitled “ETFs, a vehicle for diversifying collective savings,” the appeal of trackers lies in their hybrid structure: they combine, on the one hand, the logic of an investment fund through index replication and, on the other hand, stock trading mechanisms, since their units can be traded continuously on the stock market.

A simple index product to start with
According to the research office, this structure gives ETFs decisive advantages: significantly lower management fees benefiting from passive management that limits internal arbitrage, as well as immediate and accessible diversification in a single transaction.

The transparency of these funds is further enhanced by the daily publication of the portfolio composition. Finally, ETFs allow for increased liquidity due to the systematic presence of market makers and the creation and redemption mechanism of units that supports the secondary market.

In summary, these index funds allow an investor to buy an entire index (the MASI index, for example) in a single transaction, at a much lower cost than traditional mutual funds (OPCVM) and with liquidity comparable to that of a stock. A combination that has driven the success of these index funds worldwide since their emergence in the 1990s in the United States (see box).

It remains to be seen which ETFs will be launched first. BKGR recommends introducing an initial “simple” index product before gradually expanding the range to other underlying assets, such as bonds or commodities, “in order to support the market’s increasing sophistication without unsettling investors.”

According to a market professional, the likely initial direction is toward ETFs replicating the best-known market indices, namely the MASI and the MASI 20.

Impact on asset management

The introduction of ETFs in Morocco will have an overall positive impact on the asset management industry, which currently amounts to around 785 billion dirhams. This is all the more significant given that the sector still has considerable room for further development.

BKGR notes that the Moroccan market is still characterized by moderate penetration rates of collective investment products, at around 51% of GDP (compared to more than 100% in the most advanced economies).

The arrival of ETFs will therefore complement, rather than compete with, the existing UCITS (OPCVM) offering by addressing specific needs such as passive exposure, tactical allocation, and portfolio rebalancing.

“One can expect institutional investors to integrate ETFs alongside their existing allocations,” the research office analyzes. In the long term, it continues, the development of a deeper and more liquid market, enhanced by ETFs, could attract more foreign investors and strengthen the entire asset management industry in Morocco.

Thus, the introduction of ETFs should lead to market expansion, supported both by a broader base of savers, improved attractiveness of the Moroccan financial market, and better integration into international investment flows.

Assets under management of 25 billion dirhams by 2028
BKGR emphasizes that the success of ETFs in Morocco will depend on three key conditions: a simple initial product, liquidity ensured from launch, and an efficient creation and redemption infrastructure. “This requires active market makers, a basket of liquid securities, smooth operational processes, and competitive costs.”

International experience shows that liquidity and regulatory credibility are decisive. Morocco could avoid the difficulties observed in certain African markets, notably Nigeria, by relying on a solid institutional foundation and a gradually diversified offering.

Moreover, despite a still limited base of retail investors in UCITS assets (8.2%), the recent rise of individual investors in equity market volumes is a positive signal for the adoption of these instruments. Finally, a robust technological infrastructure and a stable regulatory framework (legal, fiscal, and foreign exchange) are also prerequisites.

BKGR has even ventured into forecasting. According to the research office’s estimates, ETF assets under management could initially create a new market with between 5 and 10 billion dirhams in assets, or about 1% of UCITS assets.

ETF assets under management could reach 25 billion dirhams by 2028 and may exceed 50 billion dirhams in the longer term (i.e., more than 5% of total assets under management).

ETFs, a global success
Since their emergence in the early 1990s, first in the United States in 1993 with the launch of the S&P 500 ETF Trust and then in Canada, ETFs have established themselves as one of the most significant financial innovations of recent decades.

Their rapid expansion, in Europe from the late 1990s and in Asia in the early 2000s, has profoundly reshaped asset allocation practices and investment policies for both institutional players and individual investors.

Today, there are 15,807 ETFs listed on stock exchanges worldwide, managed by 967 providers across 81 different exchanges. Global assets under management surpassed 19.85 trillion dollars by the end of 2025 after recording growth of +33.7% in 2024.

This growth is not limited to volume; it is also reflected in the diversity of segments covered: ETFs now come in equity, bond, commodity, sectoral, thematic, ESG, and other forms.

In the United States, ETFs have become the most mainstream and widely adopted investment vehicle, with assets under management exceeding 13.4 trillion dollars by the end of 2025, representing 68% of global assets.