BESA and Clade launch GOVEX - The first fixed income ETF in South Africa
The Bond Exchange of South Africa (BESA) and Clade Investment Management (Clade) today announced the launch of the Government Bond Exchange Traded Fund (GOVEX), the first exchange traded fund (ETF) listed on BESA and the first fixed income ETF in South Africa. The GOVEX tracks the BESA Government Bond Index (GOVI) which measures the performance of South African Government Bonds in which Primary Dealers are obliged to make a market.
Marilize Lansdell, General Manager: Market Development at BESA, commented, "We are once again delighted to partner with Clade Investment Management as we continue to meet our aim of building better markets. By providing an investable version of the GOVI, we are removing the administrative burden of investing in, and constantly rebalancing, a basket of bonds and are also allowing investors an easy, transparent and low cost method of accessing bond market performance."
Typically, ETFs aim to replicate and track an established benchmark index, such as a bond or equity index, by investing directly in the underlying security in the same proportion as represented in the index. Investments in ETFs have grown dramatically since Standard and Poors launched the first ETF in 1993. Over the past year alone, worldwide investments in ETFs have increased by US$100 billion.
According to Carl Liebenberg, CEO of Clade Investment Management, "The GOVEX provides investors the opportunity to buy and sell the performance of the entire GOVI with one trade, which allows them to focus on value added investment decisions and strategies. Internationally, bond ETFs have been very popular amongst asset managers who use the ETFs as a core investment, and generate additional returns through an array of satellite investments".
He added, We are delighted to be launching one of the most innovative and low cost products available in the world. With its superior net returns, an expected total expense ratio of around 0.02%, and its transparent and simple structure, this is possibly the best value investment product available.
