Satrix launches new dividend plus product

Satrix Managers will be introducing a new Satrix Dividend Plus security (Satrix Divi) to join its highly successful family of Satrix Exchange Traded Funds during the next month.

The Satrix Divi tracks the FTSE/JSE Dividend Plus Index, which consists of the 30 highest dividend paying companies on the JSE.  Accordingly, the Satrix Divi will provide a high yield product offering both above average dividend yield as well as capital returns.  The Satrix Divi offers investors a listed security that provides portfolio diversification, the promise of outperformance and an unique means of investing on the JSE. 

Mike Brown, General Manager of Satrix, points out that "The Satrix Divi will be the first product available to the general SA investment public that is based on fundamental indexation which looks at financial performance criteria, such as earnings, dividends or financial analysis ratios as the criteria for making securities selection in an index.  Normal indexation uses market capitalisation criteria, i.e. size and price, as the key criteria for including shares in an index."  According to Brown, "a combination of normal indexation and fundamental indexation often provides an ideal mix for investors who wish to have broad exposure to the top shares on a market, which they get by purchasing a traditional index, but now with the option of also obtaining a performance based index." 

Companies from the JSE Top 40 Index and Mid-Cap Index, excluding property companies, are considered by FTSE/JSE in compiling the Dividend Plus Index.  Only cash dividends, of a sustainable nature, are considered, and special dividends or capitalisation awards are not taken into account.  The consensus one year dividend forecast of stockmarket analysts, from the McGregor BFA Survey, is used as the database. 

Back testing of the FTSE/JSE Dividend Plus index indicates that it has provided superior returns to the broad based All Share Index over the past five years.

The IPO process will commence from Monday 30th July and the listing of the Satrix Divi will take place on Thursday 30th August.  Satrix will be holding a relatively long IPO period in order to provide time to market the new Satrix Divi to as many current and potential Satrix investors as possible.  Based on the current value of the FTSE/JSE Dividend Plus index, the new Satrix Divi share will trade at around R1,40 per share, when the listing commences on 30th August 2007.

The listing process is electronic and investors who wish to subscribe need only contact their stockbrokers to request an amount to be invested.  Should potential investors not have a stockbroker account, they can contact the "Participating Broker" Sanlam Private Investments (SPI) to open an account.  Alternatively, subscription can take place through the Satrix Investment Plan (call 086 1100 670).   The minimum investment in the IPO is R1000 and in multiplies of R1000 thereafter. 

Click here to read more about Satrix Divi Plus (PDF File 228KB)