ECONOMY: New International ETFs Lists on the JSE
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The JSE now offers a broader range of listed investment vehicles which provide investors with offshore exposure. Two new global exchange traded funds (ETFs), the CoreShares S and P500 ETF and the CoreShares S and P Global Property ETF, listed on the exchange this morning.
ETFs are investment products which track the value of a basket of shares or other assets like bonds and commodities.
The CoreShares S and P 500 ETF tracks the S and P 500 Index on the New York Stock Exchange. Its Top 10 holdings include Apple, Microsoft, Exxon Mobil, Facebook and Berkshire Hathaway.
Gareth Stobie, managing director of CoreShares, says this index is one of the most well-known indices in the world. “The S and P 500 is one of the major indices tracked by investors and is widely used as a benchmark for investment performance. This is the first time that an ETF tracking this index is available on the JSE to offer South African investors a low cost and easily accessible product to get exposure to it.”
The CoreShares S and P Global Property ETF tracks the S and P Global Property 40 Index, which intern tracks performance of the 40 largest listed property shares globally. Stobie says that the new ETF is the only one in the world to track this index and it offers investors exposure to eight different property markets across the globe, including the United States. Both indices provide exposure to the exchange rate as well as the movement in the underlying indices they track. Investors need not apply for an offshore allowance to buy them.
“The JSE is excited to broaden our offering of listed investment vehicles which allow investors to easily manage the offshore diversification of their portfolios. The new CoreShares S and P 500 ETF specifically provides another avenue to gain exposure to the US market and complements existing ETFs tracking the London, European and global markets,” says Donna Nemer: Director of Capital Markets at the JSE.
The JSE already offers investors exposure to the price movements of internationally listed blue chip shares and international indices through a range of Single Stock Futures (SSFs) and Index Futures. This means that although the JSE offers ETFs which track other international indices, until now South African investors who wanted exposure to the full S and P 500 Index had to make use of futures. “The JSE strives to offers products that serve the needs of a wide range of investors. We are excited that new the CoreShares ETFs will help especially retail investors to get offshore exposure through a product that allows them to invest over the long term and build their wealth,” says Nemer.
These two new ETFs bring the total number of ETFs listed on the JSE to 49 with a total market capitalisation of over R71 billion. “The ETF market has seen major growth globally as well as in South Africa and we expect this to continue as investors look for a lower cost products to provide them with broad and diversified market exposure,” concludes Stobie.
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