Satrix RAFI 40 to list on the JSE on Thursday 16th October
The new Satrix RAFI 40 Exchange Traded Funds (ETF) will make its debut at 09h00 on the JSE on Thursday morning, 16th October, after an IPO which raised R120,1 million from private investors.
26 877 270 Satrix RAFI 40 securities will be issued to all applicants who tendered for securities in the IPO. The new Satrix RAFI 40 securities will be issued at a price of R4,34 per security and can be traded on the JSE from the market opening on 16th October 2008.
The new Satrix securities will trade on the “Exchange Traded Funds” sector of the JSE under the abbreviated name “SATRIXRAF”, share code “STXRAF” and ISIN code “ZAE00126033”. The Satrix RAFI 40 tracks the FTSE/JSE RAFI 40 Total Return index (J260T) and is the first listed product on the JSE that tracks a total return index.
Mike Brown (pictured), General Manager of Satrix, says that “over 2000 individual investors applied for Satrix RAFI 40 securities during the Initial Public Offer (IPO) process which opened on 8th September 2008 and closed on 6th October 2008.”
Brown comments that “we have encountered considerable interest in this new product in presentations and roadshows that were conducted around the country over the past month. Despite the difficult and very uncertain market conditions on the JSE and world markets the subscription to the IPO was very encouraging. This bodes well for the long-term success of this new member of the Satrix family of ETFs.”
Brown believes that “the Satrix RAFI 40 is an important new addition to the ETFs listed on the JSE. It is a total return ETF, which ensures that all dividend income received in the portfolio is distributed and immediately reinvested on receipt thereof and remains in the portfolio thereafter. The Satrix RAFI 40 is also based on fundamental indexation, whereby the compilers of the index - Research Affiliates in the USA - have developed an index designed to reflect the performance of the top 40 companies from the FTSE/JSE All-Share Index by fundamental values. The FTSE/JSE RAFI 40 Index weights constituents using four fundamental factors rather than market capitalization. These fundamental factors are dividends, cash flow, sales and book values based on an average of five year’s published financial accounts.”
Brown suggests that “the value based methodology and the reinvestment of all income in the Satrix RAFI 40 provides a clear differentiation from other Satrix products, which are based on market cap-weighting and are not total return products. Satrix RAFI 40 thereby offers diversification and the prospect of performing independently to other Satrix products.”
Satrix Exchange Traded Funds are listed on the JSE under Exchange Traded Funds sector of the Main Board. They offer investors the convenience of purchasing exposure to an entire basket of shares on the JSE (comprising the index that is being tracked) with the simplicity and low cost of a single trade. Satrix securities can be purchased or sold through any JSE registered stockbroker. Alternatively, a substantial number of investors participate through the Satrix Investment Plan, where investments can be made from as little as R1000 lump sum or in debit orders from R300 per month.
Satrix is also registered as a Collective Investment Scheme, accordingly, Satrix products offer investors the peace of mind of being regulated by both the Financial Services Board and the JSE.
