Investors’ offshore appetite still growing – db X-trackers
Wehmeyer Ferreira, head of db X-trackers in South Africa.
db X-trackers, the JSE-listed range of five exchange traded funds (ETFs) focused on leading global equity markets, continues to win significant support from South African investors.
For the 10 months to October 31, total assets under management (AUM) rose 43.79% on 2014 to R11.3 billion.
Biggest winner was the fund focused on the Japanese market. AUM in this fund rose 107.54% for the 10 months to the end of October, reaching R782.6 million.
The largest individual fund remained the db X-tracker that captures the performance of the US equity market. In the first 10 months of the year, AUM in this fund rose 50.98% to R4,1 billion.
The fund mirroring major world indices remained the second largest db X-tracker with AUM of R3,3 billion, up on the previous year by 27.85%. European markets attracted growing interest from local investors, with AUM growth for the 10 months of 46.23%. (See tabulation below.)
Wehmeyer Ferreira, head of db X-trackers in South Africa, noted: “The figures confirm that international diversification via our affordable ETFs continues to gather traction.
“Support comes from both retail and institutional investors while financial advisers and asset managers increasingly use passive investments like our offshore exchange traded funds to bring added balance to a portfolio.
“We foresee continued growth as db X-trackers address a wide range of needs. They provide an effective rand hedge, but are from a simplistic bet against the rand. Benefits are much broader than that.”
He said principal benefits included:
• Offshore diversification
• Access to markets and sectors that would normally be out the reach of many retail investors
• Affordability as passive investment costs remain significantly lower than the cost of active investment
• Qualification as a tax-free saving instrument under new National Treasury rules
Ferreira added: “This is another year of significant growth by our funds since inception.
“This suggests market education on both passive investment and offshore diversification is growing and South African investors are now embracing this approach with prudent, long-term investments into our ETFs.”
o The db X-tracker range of ETFs is regulated by both the FSB and JSE and gives exposure to the UK, the Eurozone, the USA, Japan and developed world markets linked to index providers MSCI, FTSE and STOXX Limited.
