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Absa Capital and Vunani Capital to launch first BEE Exchange Traded Fund  

 9/5/2007 

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.  
 
Ends.

Note to the editor:

COMPOSITION OF THE NEWSA INDEX

Constituent security JSE Code Relative weight No. of Constituent Shares per Basket
BHP Billiton Plc BIL 16.15% 19 716
MTN Group Limited MTN 10.04% 24 880
SABMiller Plc SAB 8.54% 10 972
Anglo American Plc AGL 7.10% 4 301
Old Mutual Plc OML 6.78% 73 756
Standard Bank Group Limited SBK 6.31% 15 085
Sasol Limited SOL 5.69% 5 059
FirstRand Limited FSR 5.17% 56 014
Impala Platinum Holdings Limited IMP 4.63% 6 131
Gold Fields Limited GFI 3.42% 7 783
The Bidvest Group Limited BVT 2.65% 4 653
Sanlam Limited SLM 2.56% 30 138
Telkom SA Limited TKG 2.27% 3 361
Remgro Limited REM 2.15% 2 937
Anglogold Ashanti Limited ANG 2.09% 1 871
Absa Group Limited ASA 1.89% 3 513
Nedbank Group Limited NED 1,49% 2 762
Imperial Holdings Limited IPL 1.26% 2 263
Harmony Gold Mining Company Limited HAR 1.22% 4 668
Tiger Brands Limited TBS 1.06% 1 450
Investec PLC INP 0.88% 2 763
Network Healthcare Holdings Ltd NTC 0.88% 16 487
Anglo Platinum Limited AMS 0.83% 226
Sappi Limited SAP 0.81% 1 864
Woolworths Holdings Limited WHL 0.54% 6 640
Investec Limited INL 0.52% 1 632
Murray Roberts Holdings Ltd MUK 0.49% 1 725
African Rainbow Minerals Limited ARI 0.43% 953
Steinhoff International Holdings Limited SHF 0.37% 4 067
Liberty Group Limited LGL 0.35% 989
Exxaro Resources Limited EXX 0.25% 838
Naspers Limited NPN 0.21% 302
Mittal Steel Africa Limited MLA 0.20% 381
Kumba Iron Ore Limited KIO 0.17% 202
Pretoria Portland Cement Company Limited PPC 0.16% 863
Barloworld Limited BAW 0.13% 266
Lonmin Plc LON 0.13% 67
Mondi Limited MND 0.13% 473
RMB Holdings Limited RMH 0.05% 393
Compagnie Financiere Richement RCH 0.00% 0
Liberty International Plc LBT 0.00% 0

 

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)
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