Satrix Managers, the company to launch the first ETF in South Africa, has rolled out three new ETFs on the Johannesburg Stock Exchange (JSE), providing access to global, US and emerging market equities. To gain its designated exposures, Satrix will invest in funds of the iShares Core Series UCITS ETFs.
Members of Satrix Managers celebrate the launch of the three new ETFs during the JSE’s market opening ceremony by blowing the traditional kudu horn.
The Satrix MSCI World ETF (STXWDM) tracks the MSCI World Index, representing large and mid-cap companies across 23 developed markets globally. The index covers approximately 85% of the free float-adjusted market capitalization in each country. The fund has a total expense ratio (TER) of 0.35%.
The Satrix MSCI Emerging Markets ETF (STXEMG) tracks the MSCI Emerging Markets Investable Market Index, representing large, mid and small cap companies across 24 emerging market countries. The index covers approximately 99% of the free float-adjusted market capitalization in each country. The fund’s TER is 0.35%.
Gareth Allison, executive director at MSCI, commented: “Satrix has managed index-tracking products against MSCI innovative and thought leadership indices for more than 12 years, and we are happy to continue this relationship into the ETF space with two of the new funds tracking our MSCI World index and MSCI Emerging Markets IMI.”
The Satrix S&P 500 ETF (STX500) tracks the S&P 500 Index, which is the most widely followed gauge of large-cap equities in the United States. The index includes 500 of the leading companies in the US market and captures approximately 80% coverage of available market capitalization. The fund’s TER is 0.25%.
“We are pleased to expand our relationship with Satrix with the license of our iconic S&P 500 Index, enabling market participants in South Africa to access the US market” said Michael Orzano, head of equity indices, S&P Dow Jones Indices.
Prejelin Naggan, head of primary markets at the JSE, said the new ETFs can assist local investors in managing their offshore exposure and diversifying their portfolios. “The JSE offers a wide range of ETFs which provide a cost-effective way for investors to get exposure to local equity markets as well as commodities, bonds, money markets and listed property,” he said. “The new ETFs now also gives investors even greater choice when they want to include exposure to overseas markets in their portfolios.”
Helena Conradie, CEO of Satrix, added: “Our investors can now access global equity markets on the JSE alongside their local ETF investments. We are always looking at ways in which we can expand our offering and these rand-denominated ETFs allow investors to access global markets with ease, and at a low cost.
“While South Africa has world-class companies to invest in, there are many industries, economic regimes and currencies you are simply not able to access by keeping all your capital in local markets. To add some perspective, South Africa is one of 24 emerging market countries globally, and there are a further 23 countries classified as developed markets. By adding exposure to international companies you are diversifying your investment portfolio.”
The ETF market has seen steady growth globally as well as in South Africa and these three ETF listings bring the total number of ETFs listed on the JSE to 54 with a total market capitalisation of almost R72 billion.