Absa Capital reduces management fees for several ETFs  


Absa Capital, the corporate and investment banking division of Absa Bank Ltd (Absa) and affiliated to Barclays Capital, has significantly reduced the management fees for a range of their Exchange Traded Funds (ETFs), with the aim of lowering the total expense ratios (TERs) of these products.

Absa Capital issues the popular NewFunds range of ETFs and currently holds about 50% of the ETF market share in South Africa. The reduced fees are effective from 1 February 2012.

“Reducing the management fee forms part of our efforts to make our ETFs even more accessible as a long term investment tool,” said Vladimir Nedeljkovic, Head of Investments at Absa Capital.

“Furthermore, it speaks to the success the funds have enjoyed since we introduced them to the market,” added Nedeljkovic.

The current average TER for ETFs in South Africa is 0,57%. Ten of the 12 Absa Capital ETF’s impacted by the fee reduction are well below the current average. As TERs are measured over a period of 12 months, the official TER will only reflect these savings after a year, but Nedeljkovic reiterates that investors will immediately experience the actual savings.

“We believe, by making these products more affordable and accessible, it will significantly boost the growth of the NewFunds range in South Africa,” says Nedeljkovic.

For a full list of the applicable ETF and TERs, please refer to the list below.


Note to the editor:

About Exchange Traded Funds (ETFs)

Exchange Traded Funds (ETFs) are open-ended investment vehicles tracking performance of market indices or other portfolios of assets that are listed and traded on stock exchanges like stocks. ETFs combine the benefits of index tracking funds (market diversification, lower costs, simplicity, consistency, full transparency), with those of listed securities (real-time access to markets, full liquidity due to the presence of a market maker, no counterparty risk). For more information please visit

NewFunds TERs

The table below illustrates the difference in TERs that can be expected for NewFunds henceforth:

ETF Product Type and Index Tracked Current TER
(Dec 2011)
Expected TER
(Dec 2012)
NewFunds Shari’ah 40 Tracks FTSE/JSE Shari’ah 40 Index 0,90% 0,33%
NewFunds eRafiTM Overall Tracks Enhanced RAFI Overall SA Index 0,62% 0,21%
NewFunds eRafi™ Resource 20 eRafi™ Resource 20 Index 1,03% 0.21%
NewFunds NewFunds eRafi™ Industrial 25 eRafi™ Industrial 25 Index 1,09% 0.21%
NewFunds NewFunds eRafi™ Financial 15 eRafi™ Financial 15 Index 1.30% 0.21%
NewFunds MAPPSTM Growth Balanced portfolio: 75% equities, 10% bonds, 10% inflation-linked bonds, 5% cash 1,10% 0,52%
NewFunds MAPPSTM Protect Balanced portfolio: 40% equities, 10% bonds, 35% inflation-linked bonds, 10% cash 1,01% 0,55%
NewFunds TRACI 3 month tradable cash instrument index n/a 0,21%
NewFunds GOVI SA Government Bond Total Return Index n/a 0,27%
NewFunds ILBI SA Government Bond Total Return Index n/a 0,30%
New Funds SWIX 40 FTSE/JSE SWIX 40 Total Return Index n/a 0,40%
NewFunds Equity Momentum Barclays Absa SA Equity Momentum Index n/a 0,39%

Note: The last five ETFs listed above only listed on the JSE on 26 January 2012 and therefore have no TER available.

About Absa Capital

Absa Capital, a division of Absa Bank Limited (Absa) and affiliated to Barclays Capital, is a leading South African corporate and investment bank with global reach, offering clients financing, risk management and advisory solutions in a wide range of currencies and structures across the globe. Absa Capital is a leading provider of ETFs in the South African market and is credited for several innovations and market-firsts in the space, including the first commodity backed ETF in South Africa (NewGold), the first family of ETFs based on fundamental indexation (eRAFI™), and the first and only family of multi-asset ETFs in SA (MAPPSTM).

Issued by:

FTI Consulting
Lauren Thys
+27 11 214 2420
+27 82 309 0788

For further information contact:

Graeme Coetzee
Associate Principal
Marketing and Corporate Communications
Absa Capital
+27 11 895 6695
+27 79 695 9798

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