Absa Capital, one of South Africa’s leading investment banks, and Vunani Capital are to launch South Africa’s first BEE Exchange Traded Fund (ETF) on September 19th 2007 creating an investable BEE financial instrument.
The fund, called NewSA, is a portfolio in NewFunds Collective Investment Scheme, a 50/50 joint venture between BEE company Vunani Capital and Absa Capital and is the first investment product to give investors the opportunity to reward and recognise transformation.
It is aimed at institutional investors, fund and asset managers as well as high net worth individuals wanting to increase their exposure to blue-chip companies listed on the JSE with high black economic empowerment (BEE) ratings.
The NewSA ETF will track the performance of the NewSA Index, a modified Top40 index, with the constituent weightings adjusted to reflect their respective BEE status, as determined using the Codes of Good Practice on Broad-Based Black Economic Empowerment, published by the Department of Trade and Industry.
The empowerment scores of the NewSA Index constituents are provided by Empowerdex, an independent empowerment rating agency, and the Index itself is independently calculated by the FTSE and the JSE.
John Vitalo, CEO of Absa Capital said: “The NewSA ETF allows market forces to reward transformation by allocating relatively more funds to those companies in the Top 40 with a higher broad-based empowerment rating.
“I’m extremely proud of the NewSA ETF, which captures our belief in transformation as an essential driver of growth, as well as our ability to help effect transformation through financial innovation.”
Vladimir Nedeljkovic, Head of Hybrids at Absa Capital says that NewSA will appeal to people who have a positive sentiment towards South Africa and its growth opportunities and provide investors a clear means of supporting BEE in South Africa without forgoing investment performance.
“NewSA ETF will offer a convenient and cost-effective investment option for institutional investors - especially those managing governmental and para-governmental investment vehicles, but also other fund and asset managers with a mandate to gain exposure to BEE companies,” said Nedeljkovic.
The structure of the NewSA fund minimises risk through the diversification benefits of its 40 shares, is liquid, traded as shares, with no restrictions on entry and exit, and is cost effective and transparent.
The fee structure is based on a sliding scale, with management fees as low as 0.15% per annum for large investors. In addition, normal brokerage and statutory costs apply the same as they would for any other instrument listed on the JSE.
Ethan Dube, CEO of Vunani Group said: “We believe in the prosperity of the new South Africa and want to endorse initiatives that enable the development of the country. By supporting companies that are represented in the NewSA Index, the fund indirectly enables investors to endorse the country’s growth.”
Nedeljkovic notes that NewSA is likely to provide sound return as the companies in the fund are SA’s top performers.
NewSA Securities in issue are covered by physical holding of NewSA Index constituent shares. The underlying shares are held in a trust (NewSA Trust) with independent Trustees. The JSE has guaranteed settlement of all NewSA trades on the JSE.
Note to the editor:
COMPOSITION OF THE NEWSA INDEX
||No. of Constituent Shares per Basket|
|BHP Billiton Plc
|MTN Group Limited
|Anglo American Plc
|Old Mutual Plc
|Standard Bank Group Limited
|Impala Platinum Holdings Limited
|Gold Fields Limited
|The Bidvest Group Limited
|Telkom SA Limited
|Anglogold Ashanti Limited
|Absa Group Limited
|Nedbank Group Limited
|Imperial Holdings Limited
|Harmony Gold Mining Company Limited
|Tiger Brands Limited
|Network Healthcare Holdings Ltd
|Anglo Platinum Limited
|Woolworths Holdings Limited
|Murray Roberts Holdings Ltd
|African Rainbow Minerals Limited
|Steinhoff International Holdings Limited
|Liberty Group Limited
|Exxaro Resources Limited
|Mittal Steel Africa Limited
|Kumba Iron Ore Limited
|Pretoria Portland Cement Company Limited
|RMB Holdings Limited
|Compagnie Financiere Richement
|Liberty International Plc
Index Level: 24 280.19
Basket value: R24 280 10
The Constituent Shares set out above are extracted from the latest available information as at 24 August 2007 and are included for information purposes only. For accurate information on the Constituent Shares, the number of Constituent Securities in one Basket, the Basket value and the Index Level, consult the NewFunds website: www.newfunds.co.za.
About Absa Capital
Absa Capital, a division of Absa Bank Limited (Absa) and affiliated to Barclays Capital, is a leading South African investment bank with global reach, offering clients financing, risk management and advisory solutions in a wide range of currencies and structures across the globe.
About Vunani Capital
- Vunani Capital is a wholly owned subsidiary of Vunani Capital Holdings
- The Vunani group is a black owned and managed financial services group that was established in 1998. A management buy-out from its holding company in 2004 led to the introduction of a strategic equity partner in the form of Absa Bank, a subsidiary of Barclays Bank
- The group is positioned as an investment banking boutique
Vunani is involved in:
- Securities trading and research (equities, bonds and money market)
- Property investment and property development
- Private equity
- Investment banking
- Alternative asset management
- Corporate advisory (Equity and Debt Capital Markets)