Absa Capital Lists First BEE ETF

First Ever BEE Exchange Traded Fund Lists on the JSE

Absa Capital – one of the leading investment banks in South Africa - and Vunani Capital broke new ground again today with the listing of NewSA, South Africa’s first BEE Exchange Traded Fund (ETF).

NewSA, a joint venture between Absa Capital and Vunani Capital, is the first product to offer an investable BEE financial instrument.

Vladimir Nedeljkovic, Head of ETF’s and Index Products at Absa Capital, said that the NewSA ETF would give investors the opportunity to reward and acknowledge transformation.

“It is aimed at institutional investors, fund and asset managers, as well as high net worth individuals wanting to increase their exposure to blue-chip companies, with high black economic empowerment ratings, listed on the JSE,” said Nedeljkovic.

“NewSA is likely to provide sound returns as the companies in the fund are South Africa’s top performers.”

The initial size of the fund will be R44.2m.

The NewSA ETF will track the performance of the NewSA Index, a modified Top40 index, with the constituent weightings adjusted to reflect their respective BEE status. This is determined by using the Codes of Good Practice on Broad Based Black Economic Empowerment, published by the Department of Trade and Industry.

The empowerment scores of the NewSA Index constituents are provided by Empowerdex, an independent empowerment rating agency, and the index itself is independently calculated by the FTSE and the JSE.

Ethan Dube, CEO of Vunani Group said: “The NewSA ETF allows market forces to recognise transformation by allocating relatively more funds to those companies in the Top 40 with a higher broad-based empowerment rating.”

“By supporting companies that are represented in the NewSA Index, the fund indirectly enables investors to endorse the country’s growth,” said Dube.

NewSA ETF offers a particularly convenient and cost-effective investment option for institutional investors - especially those managing governmental and para-governmental investment vehicles – as well as other fund and asset managers with a mandate to gain exposure to BEE companies.

The structure of the NewSA fund minimises risk through the diversification benefits of its 40 shares.

“NewSA is liquid, traded like shares, has no restrictions on entry and exit, and is cost effective and transparent,” said Nedeljkovic.