First Ever BEE Exchange Traded Fund Lists on the JSE
Absa Capital – one of the leading investment banks in South Africa - and Vunani Capital broke new ground again today with the listing of NewSA, South Africa’s first BEE Exchange Traded Fund (ETF).
NewSA, a joint venture between Absa Capital and Vunani Capital, is the first product to offer an investable BEE financial instrument.
Vladimir Nedeljkovic, Head of ETF’s and Index Products at Absa Capital, said that the NewSA ETF would give investors the opportunity to reward and acknowledge transformation.
“It is aimed at institutional investors, fund and asset managers, as well as high net worth individuals wanting to increase their exposure to blue-chip companies, with high black economic empowerment ratings, listed on the JSE,” said Nedeljkovic.
“NewSA is likely to provide sound returns as the companies in the fund are South Africa’s top performers.”
The initial size of the fund will be R44.2m.
The NewSA ETF will track the performance of the NewSA Index, a modified Top40 index, with the constituent weightings adjusted to reflect their respective BEE status. This is determined using the Codes of Good Practice on Broad Based Black Economic Empowerment, published by the Department of Trade and Industry.
The empowerment scores of the NewSA Index constituents are provided by Empowerdex, an independent empowerment rating agency, and the index itself is independently calculated by the FTSE and the JSE.
Ethan Dube, CEO of Vunani Group said: “The NewSA ETF allows market forces to recognise transformation by allocating relatively more funds to those companies in the Top 40 with a higher broad-based empowerment rating.”
“By supporting companies that are represented in the NewSA Index, the fund indirectly enables investors to endorse the country’s growth,” said Dube.
NewSA ETF offers a particularly convenient and cost-effective investment option for institutional investors - especially those managing governmental and para-governmental investment vehicles – as well as other fund and asset managers with a mandate to gain exposure to BEE companies.
The structure of the NewSA fund minimises risk through the diversification benefits of its 40 shares.
“NewSA is liquid, traded like shares, has no restrictions on entry and exit, and is cost effective and transparent,” said Nedeljkovic.
Note to the editor:
The fee structure is based on a sliding scale, with management fees as low as 0.15% per annum for large investors. In addition, normal brokerage and statutory costs apply as they would for any other instrument listed on the JSE. NewSA Securities in issue are covered by physical holding of NewSA Index constituent shares. The underlying shares are held in a trust (NewSA Trust) with independent trustees. The JSE has guaranteed settlement of all NewSA trades on the JSE.
Absa Capital ETFs and Index Products
Absa Capital is a leading originator of exchange traded funds (ETFs) in the South African market. The investment bank listed and operates NewRand, the first ETF in South Africa based on a proprietary investible index (the NewRand Index, comprising rand hedge stocks with the highest correlation with the Rand/USD exchange rate), as well as NewGold, the first and only gold ETF in South Africa as well as the largest ETF in the SA market with R6.5billion in assets under management.
ETFs are open-ended collective investment schemes that are listed on a stock exchange and which can be traded at any time throughout the course of the day. Typically, ETFs try to replicate a stock market index such as the FTSE/JSE Top 40 Index, a market sector such as resources or financials, or a commodity such as gold.
Absa Capital, a division of Absa Bank Limited (Absa) and affiliated to Barclays Capital, is a leading South African investment bank with global reach, offering clients financing, risk management and advisory solutions in a wide range of currencies and structures across the globe.
Vunani Capital is a wholly owned subsidiary of Vunani Capital Holdings. The Vunani group is a black owned and managed financial services group that was established in 1998. A management buy-out from its holding company in 2004 led to the introduction of a strategic equity partner in the form of Absa Bank, a subsidiary of Barclays Bank. The group is positioned as an investment banking boutique.
Composition of the NewSA Index
Cons Code Company Name % Weighting within Index Holdings per Basket
1 MTN Group 13.08% 23,675.46
2 BHP Billiton 13.06% 16,715.17
3 SABMiller 9.03% 10,593.20
4 Standard Bank Group 8.92% 21,762.29
5 Anglo American 8.13% 7,535.49
6 Sasol 6.79% 5,366.10
7 Firstrand Limited 4.65% 59,918.70
8 Naspers 4.31% 5,372.79
9 Anglogold Ashanti 4.07% 3,510.70
10 Old Mutual 2.68% 64,694.45
11 Absa Group 2.35% 4,352.88
12 Sanlam 2.22% 25,180.93
13 Gold Fields 2.08% 4,850.28
14 Bidvest Group 1.88% 3,704.01
15 Telkom 1.84% 3,335.41
16 Nedbank Group. 1.58% 3,218.49
17 Remgro 1.50% 3,746.48
18 Harmony 1.42% 3,185.34
19 Investec PLC 1.27% 6,214.75
20 Tiger Brands 0.98% 1,373.91
21 Anglo Platinum 0.92% 402.23
22 African Bank Invest 0.89% 6,977.50
23 Aveng 0.84% 5,371.76
24 Investec Ltd 0.84% 3,866.54
25 Sappi 0.79% 4,021.12
26 Pretoria Portland Cement 0.68% 4,294.51
27 RMB Holdings 0.66% 5,371.02
28 Kumba Iron Ore 0.52% 662.42
29 Steinhoff International Holdings 0.47% 8,021.63
30 Liberty Hldgs. 0.43% 1,257.14
31 African Rainbow Minerals Ltd. 0.36% 781.94
32 Murray & Roberts 0.25% 1,056.86
33 Shoprite 0.24% 897.41
34 Exxaro Resources 0.21% 628.56
35 Mondi Ltd 0.07% 429.19
Index Level: 20,411.44
Basket value: R20,411,440
The constituent shares set out above are extracted from the latest available information as at 27 November 2007 and are included for information purposes only. For accurate information on the constituent shares, the number of constituent securities in one basket, the basket value and the index level, consult the NewFunds website: www.newfunds.co.za.
+27 11 214 2406
+27 82 561 7172
For further information contact:
Dr Vladimir Nedeljkovic
Head: ETF’s and Index Products
+27 11 895 5367
+27 11 263 9514
+27 11 895 6695
+27 79 695 9798