Investors spoilt for choice in listed ETFs

ALL BUT THREE OF 24 FUNDS OFFER INTERNATIONAL EXPOSURE Over the last 15 months, SA investors have seen a significant increase in JSE-listed exchange-traded funds.

Fifteen new products listed in 2017, seven have listed in 2018 and two have made initial public offerings. All but three of these 24 funds offer international exposure.

Local investors now have an extensive, growing range of ETFs from which to choose. Here’s what the 2018 funds offer:

It’s a feeder fund: STANLIB doesn’t track the index but invests into another fund that does.

The ETF invests into the iShares Core S&P 500 UCITS ETF – the same fund into which the Satrix S&P 500 Feeder ETF invests. These products are identical, apart from cost.

CoreShares’ TER is currently subsidised and will increase in future.

While cost is a significant factor, it’s also important to consider how closely the funds track the underlying index. Also, the Satrix and STANLIB funds automatically reinvest dividends and therefore don’t pay distributions, while Sygnia Itrix and CoreShares pay out every six months.

It’s an identical strategy to the Satrix MSCI World Equity Feeder ETF. It feeds into the iShares Core MSCI World UCITS ETF and automatically reinvests dividends.

Sygnia Itrix offers different fee levels depending on the platform and amount invested. The fee shown is the highest possible.

This offers specific exposure to US tech stocks. It feeds into the iShares S&P 500 Information Technology UCITS ETF, which tracks the S&P 500 Info Tech Index.

The stocks are all those in the S&P 500 classified as part of the IT sector. It’s fairly concentrated (69 stocks). The largest constituents are Apple (15.3%), Microsoft (12.09%) and Facebook (7.34%).

The S&P Dow Jones Indices dividend aristocrats strategy has been extremely popular and successful. To be included in it, companies must have consistently maintained/grown dividends.

It invests in high-quality, reliable, dividend-paying stocks expected to produce a growing income. It covers over 275 companies in 24 countries.

While CoreShares S&P Global Property ETF and Sygnia Itrix Global Property ETF track the S&P Global Property 40 Index, this fund will track the FTSE EPRA/NAREIT Global Reit Index.

The STANLIB index is much more diversified (477 constituents versus 41) and slightly more exposed to the US.

It tracks the Citi World Government Bond Index (WGBI), which only includes investment-grade government bonds.

It feeds into the iShares Global Govt Bond UCITS ETF, which tracks the FTSE G7 Government Bond Index. This is a narrower index than the WGBI, and includes only bonds issued by G7 nations.

This is the first local ETF to track the US’s tech-heavy Nasdaq Index (largest companies: Apple, Amazon, Microsoft, Facebook and Alphabet).

It’ll track a proprietary index that’ll give investors exposure to the rest of Africa’s real estate market, mainly Egypt, Morocco, Botswana and Nigeria.