Johannesburg Stock Exchange introduces three new Satrix exchange traded funds
The Johannesburg Stock Exchange (JSE) now offers investors an even wider range of products which give investors exposure to global markets with the listing of three new Satrix exchange traded funds (ETFs). The new ETFs will track the MSCI World index, MSCI Emerging Markets Investable Market Index and the S&P 500®.
ETFs are investment products which track the value of a basket of shares or other assets like bonds and commodities. Prejelin Naggan, Head of Primary Markets at the JSE, says the new ETFs can assist investors further 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. The new ETFs now also gives investors even greater choice when they want to include exposure to overseas markets in their portfolios.”
Naggan says ETFs are also a useful tool for first-time investors. “As the JSE we strive to make investment more accessible to all South Africans and cost-effective products which are easy to use, can play an important role through helping to demystify investing. ETFs also allows retail investors to start investing with a relatively small initial amount or monthly payment, which also increases accessibility.”
On the new ETFs Helena Conradie, CEO of Satrix, says, “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.”
Conradie adds, “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 Satrix MSCI World ETF will track the performance of the MSCI World Index, which represents 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 Satrix MSCI Emerging Markets ETF will track the performance of the MSCI Emerging Markets Investable Market Index (IMI), which represents 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 Satrix S&P 500 ETF will track the performance of the S&P 500® Index, which is widely regarded as the best single 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.
Satrix will replicate the indices by investing in funds of the iShares® Core Series UCITS ETFs. iShares® is a family of exchange traded funds marketed and managed by BlackRock, a global leader in investment management, risk management and advisory services for institutional and retail clients.
“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” says Gareth Allison, Executive Director at MSCI.
“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” says Michael Orzano, Head of Equity Indices, S&P Dow Jones Indices.
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.