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JSE expands range of global ETFs

13 March 2018Prejelin Naggan, JSE
Prejelin Naggan, Head of Primary Markets at the JSE.

Prejelin Naggan, Head of Primary Markets at the JSE.

Nicola Comninos, Head of Strategy, JSE Capital Markets and Boshoff Grobler, CEO of Ashburton.

Nicola Comninos, Head of Strategy, JSE Capital Markets and Boshoff Grobler, CEO of Ashburton.

Boshoff Grobler, CEO of Ashburton

Boshoff Grobler, CEO of Ashburton

Ashburton lists World Government Bond ETF on the JSE.

Today the Ashburton World Government Bond Exchange Traded Fund (ETF) listed on the Johannesburg Stock Exchange (JSE), becoming the exchange’s first global bond ETF and broadening its offering of indexed funds through which investors can obtain exposure to a range of geographic regions and investment strategies in an affordable manner.

The Ashburton World Government Bond ETF will track the Citi World Government Bond Index (WGBI), which invests in fixed-rate, local currency, investment grade sovereign bonds. The WGBI consists of over 20 developed and emerging market countries that meet specific criteria for market size, credit quality and barriers to entry. These include the United States, the United Kingdom, Canada, Germany, Japan, France, Australia and South Africa. Local investors will be able to invest in Rand and also offer retail investors the benefit of not having to use their offshore allowances to invest in the ETF.

Prejelin Naggan, Head of Primary Markets at the JSE says the exchange is delighted to expand its offering of global ETFs to South African investors. “The JSE is excited to add its first global bond ETF to the market, and proud to be the first exchange to list the Ashburton WGBI ETF. The local ETF industry has demonstrated its ability to continue evolving and broaden its offering in line with investors’ needs and demand, at an affordable cost and in an easily accessible manner.”

Samantha Schoeman, Head of Index Solutions at Ashburton Investments said: “We are pleased to add the first global bond ETF to the JSE, expanding the range of worldwide investment options available to local investors and giving the South African retail and institutional market the opportunity to diversify their portfolios. We are confident this will add depth to the credit investment opportunity set available locally.”

ETFs are investment products which comprise an investment portfolio of shares or other assets, such as bonds and commodities based on a predetermined method. The way that the portfolios are composed is usually determined by an underlying index of securities – in this case the Citi World Government Bond Index. The ETF tracks the value of the underlying index by investing in the bonds that make up the index in the same ratio to each other as they are in the index. In short: ETFs provide investors with access to low-cost passive investment products incorporating investment management expertise.

Today’s listing will bring the number of ETFs listed on the JSE to 67 exceeding the total market capitalization of R73 billion. “ETFs are an increasingly important building block in ordinary South Africans’ investment portfolios, as these products offer exposure to a wide range of investment destinations and strategies in a way that is easy to understand, and accessible through an affordable monthly contribution,” says Naggan.

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