[South Africa] Satrix lists global infrastructure ETF on the JSE
The Satrix Global Infrastructure Feeder ETF (STXIRF) began trading on the Johannesburg Stock Exchange (JSE), offering investors an investment vehicle that gives them exposure to a diversified portfolio of the largest and most liquid infrastructure companies in developed and emerging markets.
The ETF, which trades under JSE code STXIFR tracks the performance of the FTSE Global Core Infrastructure Index. The index is made up of stocks selected from the FTSE Global All Cap Index using FTSE Russell’s definition of infrastructure. In terms of selection for participation in the index, stocks are weighted to ensure that the index is investable and stocks are screened to enable the tradability of the index.
The underlying asset in the STXIRF portfolio is the iShares Global Infrastructure UCITS ETF, part of a family of Exchange Traded Funds (ETFs) managed by BlackRock, a global investment management firm with $7.4 trillion of assets under management. Investors in STXIFR, which is managed by Satrix Managers, will receive quarterly income distributions in March, June, September and December in each year.
Valdene Reddy, Director of Capital Markets at the JSE, welcomed the listing of STXIRF on the JSE and said the listing would provide investors with an opportunity to diversify their investment portfolios.
“This ETF (STXIFR) allows investors to contribute towards the provision of infrastructure in the form of roads, railway transportation, ports, airports, power, and telecommunications, which are necessary for economies to work efficiently and to be globally connected through a basket of shares that offer offshore diversification at an affordable cost,” said Reddy.
Kingsley Williams, Chief Investment Officer at Satrix, said there is increasing demand from investors to access infrastructure and the types of returns infrastructure typically offers, especially when investing offshore.
“Infrastructure investing aims to offer investors exposure to assets with lower volatility more stable returns, access to higher yielding investments and an ability to hedge against inflation. These are sought after features which further serve to diversify portfolios,” said Williams.
Reddy also pointed out that while infrastructure projects are capital-intensive, high-cost investments, they are vital to a country’s economic development and prosperity. The listing of STXIRF has boosted the number of ETF listings on the JSE to 85, increasing total ETF market capitalisation to over R116 billion.