The Johannesburg Stock Exchange (JSE) on Thursday welcomed the Satrix SA Bond ETF to the main board of the JSE in its first virtual listing and the first ETF listing in 2020.
The Exchange Traded Fund (ETF) will track the S&P South Africa Sovereign Bond 1+ year Index, which allows investors to automatically reinvest their coupons. The index is market value-weighted and consists of bonds with maturities of one year or more.
Valdene Reddy, Director of Capital Markets at the JSE, said the ETF was perfectly suited for investors needing a more defensive asset class while chasing inflation-beating yields and capital growth.
“The ETF offers investors an opportunity to invest in a basket of Rand-denominated sovereign debt publicly listed by the government of South Africa. This offers investors alternatives and significant diversification to their investment portfolios,” said Reddy.
The Satrix SA Bond ETF is the sixth local Bond ETF to list on the JSE – thus opening up an even wider choice for investors in search of debt exposure, in a single instrument.
The JSE’s total ETF market cap is close to R95bn with current average daily value traded being R600m per day, almost three times the average daily value for 2019. The total year-to-date value traded was in excess of R50 billion, almost equal to the total value traded in 2019.
The evolution of South Africa’s ETF landscape over the last 20 years has been remarkable with the JSE now offering 74 different types of ETFs, ranging from broad market equity exposure, local and global debt, equity and property exposure, access to precious metals, Africa (ex-SA) equity ETFs and Smart Beta ETFs.
“In these significantly volatile environments, trading instruments such as ETFs offer attractive and diverse opportunities for investment”, said Reddy.
Helena Conradie, Satrix CEO, said over the last few years, Satrix has spent considerable time making sure that its wide range of ETF products offered a broad range of alternatives to cater for all investors.
“We now offer ETFs covering most asset classes both locally and globally. Needless to say, COVID-19 has forced all businesses to completely rewrite their 2020 plan. Satrix is fortunate that we can still go ahead with most of our planned listings this year, despite the turmoil. This demonstrates our belief in the future of South Africa,” said Conradie.