The Johannesburg Stock Exchange (JSE) is pleased to announce the listing of the first Actively Managed Exchange Traded Fund (AMETF) by 10X Investments, the CoreShares Income Actively Managed Exchange Traded Fund. This follows the amendment of JSE Listings Requirements in October 2022 after consulting with market participants.
An AMETF is a Collective Investment Scheme (CIS) that is listed and traded on the market. The new regulations mean that underlying assets or securities of the AMETF must comply with the requirements as determined by the FSCA and must also be deemed “sufficiently liquid for robust pricing”. Investment managers will, therefore, be able to list ETFs with active investment strategies and will no longer be restricted to purely tracking a benchmark.
The CoreShares Income AMETF aims to deliver a high level of income and long-term stability on capital invested, through investing in a combination of asset classes including bonds, money markets, debt and credit.
“The CoreShares Income AMETF will strategically invest in a diversified portfolio of income opportunities, including offshore investment-grade and high-yield debt indices, local credit, government bonds (both nominal and inflation linked) as well as cash,” says Anton Eser, Chief Investment Officer at 10X. “We’re confident in our ability to provide investors with a high yield and a consistent income stream, with a return profile that is not unlike bonds but, which carries significantly lower risk thanks to diversification and sound risk management frameworks.”
Previously, the only ETFs allowed domestically were those that passively tracked underlying indices, or physical commodities. Yet actively managed ETFs have seen strong growth globally. According to etfGI, the actively managed ETF industry has increased its assets under management by 7.2% as at end February 2023 to $522bn from $487 billion at the end of 2022.
“We are thrilled to welcome the CoreShares Income Actively Managed ETF. New funds such as these will provide South African investors with an opportunity to further diversify their portfolios in a cost-effective manner and are an indication of JSE efforts to be at the centre of product innovation,” says Valdene Reddy, the Director of Capital Markets at the JSE.
Coreshares by 10X is an investment management firm that specialises in developing innovative solutions for South African investors and is committed to providing investors with access to unique and differentiated strategies through the power of ETFs.