Sygnia obtains regulatory approval for purchase of DB X-trackers

Magda Wierzycka, CEO of Sygnia.

Sygnia is very pleased to announce that the relevant regulatory approvals, namely those of the Competition Authorities and the Registrar of Collective Investment Schemes, have been obtained for its purchase of db X-trackers (RF) Proprietary Limited (“DBX”) from Deutsche Group Holdings (South Africa) Proprietary Limited (“Deutsche”) for a total consideration of R325 000 000. Sygnia will take over the ownership and operational control of DBX on 1 July 2017. The name of db X-trackers will be changed to Sygnia Itrix after the transaction becomes effective. DBX currently offers five ETFs referencing the following market indices; Euro Stoxx 50, FTSE 100, MSCI Japan, MSCI USA, and MSCI World.

“We are very excited about the acquisition of db X-trackers”, says Magda Wierzycka, CEO of the Sygnia Group. “The acquisition immediately increases our assets managed on a passive basis to R28.1 billion, making us one of the largest index-tracking asset managers in South Africa. More importantly, it allows Sygnia to enter the ETF market with substantial assets and a highly credible product offering.”

The acquisition comes at a time when the South African rand is enjoying a period of relative strength in response to strong foreign inflows into all emerging markets. “Given the economic fundamentals in South Africa and the heightened political risk, we do not believe that this is a sustainable situation and hence this is a perfect time to invest money offshore.”

The acquisition does not affect existing ETF investors in any way and they do not need to take any action.

“However, as a market disruptor, we immediately aim to lower the cost of access to db X-trackers for the average investor. Consequently, the ETFs are immediately available through Sygnia Securities and, following 1 July 2017, through the Sygnia LISP platform. Sygnia Securities will charge a brokerage of 0.10% on all trades in the ETFs, while the Sygnia LISP platform will charge a nil administration fee for the administration of either lump sum or regular monthly investments. This represents a substantial saving for most regular investors who normally pay up to 1% per annum for investment plans. In addition, we are making all other ETFs available on our LISP platform.”