Fund man­ager

Finweek English Edition - - FUND IN FOCUS - The pop­u­lar­ity of

db x-track­ers is ev­i­dent as its five ex­change-traded funds (ETFs) have grown to such an ex­tent that they now have more than R10bn in as­sets un­der man­age­ment (AUM). Its US-linked ETF, with AUM of R3.3bn, is prov­ing the most pop­u­lar. The other op­tions are UK, Ja­pan, Eu­ro­zone and World.

Wehmeyer Fer­reira, head of db x-track­ers South Africa, says the World In­dex ETF of­fers a great op­por­tu­nity for in­vestors to di­ver­sify their port­fo­lios. “There are things play­ing out all over the world that are neg­a­tive to a de­gree for eq­uity mar­kets. The ben­e­fit of a world fund is that you get ac­cess to a broad base to spread risk around.”

Cur­rently, the World ETF is skewed to­wards the US, which makes up 57% of the coun­try al­lo­ca­tion. Other ma­jor mar­kets in­clude Ja­pan (9%) and the UK (8%), while Canada, France and Switzer­land ac­count for 4% re­spec­tively, and Ger­many and Aus­tralia for 3% each. On a sec­tor ba­sis, 23% of the fund is in­vested in non-cycli­cal con­sumer busi­nesses, 21% in fi­nan­cial, 11% in in­dus­trial and 11% in cycli­cal con­sumer busi­nesses.

With the rand at 14-year lows, is it wise to in­vest in a fund that is de­nom­i­nated in US dol­lars? Fer­reira says db x-track­ers ad­vise in­vestors not to look at the value of the rand in ab­so­lute terms. “We ad­vo­cate that, if the ma­jor­ity of your sav­ings are based in South Africa, you have sub­stan­tial rand ex­po­sure. We are great be­liev­ers in diver­si­fi­ca­tion, in terms of coun­try and cur­rency ex­po­sure.”

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