ECONOMY: Rand Merchant Bank Lists SA’s First US Treasury Bond Custodial Certificates ETF on the JSE
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Rand Merchant Bank (RMB), a division of FirstRand Bank Limited, has listed South Africa’s first US Treasury Bond Custodial Certificates ETF on the JSE, allowing investors to earn US-dollar linked returns and showcasing the exchange’s ongoing broadening of its universe of ETFs. The product is called the Dollar Custodial Certificate with JSE share code DCC USD.
Dr Ebrahim Patel, an Alternative Asset Specialist at RMB, says, “The Dollar Custodial Certificates ETF offering is RMB’s second Custodial Certificates listing on the JSE, the first being our Krugerrand Custodial Certificates ETF. Both of these ETFs are suitable for individual as well as institutional investors. They both allow investors to save in an international asset that offers inflation-beating real returns in US dollars.”
Dr Patel clarifies that investment capital credit exposure of this ETF is directly linked to the US Federal Reserve, with investment performance therefore directly related to the USD/ZAR exchange rate and the price performance of US Treasury bonds.
ETFs are investment products which track the value of a basket of shares or other assets like bonds and commodities.
Donna Nemer, Director of Capital Markets at the JSE, says, “This new EFT will offer both our institutional and individual investors offshore exposure to US Treasury Bonds and denominated in USD, offering investors liquid capital within flexible parameters.”
The ETF market has seen steady growth globally as well as in South Africa and this ETF listing brings the total number of ETFs listed on the JSE to 50, with a total market capitalisation of over R69 billion.
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