JSE sees surge in ETF listings
Absa lists NewFunds Low Volatility and Value Equity ETFs
Johannesburg, 26 March 2018: Today the Absa NewFunds Low Volatility and Value Equity ETFs listed on the Main Board of the JSE. These listings bring to nine the total number of new ETFs to list on the JSE this year.
The NewFunds Low Volatility Equity ETF is aimed at providing investors with diversified exposure to 20 highly liquid constituent securities in the South African equity market which exhibit the lowest volatility as well as a low beta to the market in their performance. The ETF tracks the Absa Wits Risk-Controlled SA Low Volatility Index.
The NewFunds Value Equity ETF provides diversified exposure to 30 highly liquid constituents securities in the South African equity market that exhibit value characteristics (low price-to-earnings and price-to-book ratios). It tracks the Absa Wits Risk-Controlled SA Value Index.
Both indices were created by Absa Bank Limited in collaboration with The University of Witwatersrand (Wits) using their Findata@Wits® database, making these the first publicly listed ETFs that have been designed in a collaboration partnership with a leading South African academic institution and entrepreneurial start-up in the form of AddYou (Pty) Ltd.
Donna Nemer, Director of Capital Markets at the JSE says the exchange is excited about the continued growth and development of the South African ETF industry. "The JSE is seeing an encouraging surge in the listing of new ETFs, which increasingly offer South African investors greater exposure to a range of sectors and also global markets. In keeping with global trends, the local ETF industry is also effectively responding to the need for more sophisticated products which incorporate the expertise of active investment managers – and in this case an academic institution – into passive investment products."
"These new listings complete the triumvirate of standalone investable South African equity risk premia solutions in the Absa stable, says Ryan Sydow, Head of Distribution, Index and Structured Solutions at Absa Corporate and Investment Banking. "The significant amount of empirical research into risk premia investing is partly responsible for the huge global growth in Index/ETF investing and provides investors (large pension funds all the way through to self-invested retail investors) with a new tool kit and risk focused lens through which portfolio construction can take place. Being able to access rewarded risks in the market we, together with our partners, are proud to be leading the way in South Africa when it comes to this approach to investing."
The JSE is now home to 72 ETFs with a total market capitalization of over R72 billion. "ETFs are a simple and cost-effective tool and especially useful to first-time investors. The broadening range of ETFs listed on the JSE means that these investors now also have greater choice," says Nemer.
Prejelin Naggan, Head of Primary Markets, JSE and Chris Edwards, Head of
Index and Structured Solutions, ABSA