The Johannesburg Stock Exchange (JSE) today announced the listing of the Satrix JSE Global Equity Exchange Traded Fund (ETF) (STXJGE), offering investors an opportunity to tap into local equities with a pronounced global exposure. The Satrix JSE Global Equity ETF is designed to track the FTSE/JSE Global Investor Index, renowned for its focus on companies that generate a substantial portion of their earnings from offshore investments, thereby serving as a strategic Rand hedge when compared to our local broad market index.
This fund is tailored for investors seeking aggressive growth, featuring a targeted annual Total Expense Ratio (TER) of just 0.15%. It leverages the FTSE/JSE Global Investor Index as its benchmark, which is composed of 50 of the largest locally listed companies. These companies are diversified across key sectors with 48% in Industrials, 36% in Resources and 15% in Financials, ensuring a balanced yet dynamic investment foundation. Constituents include BHP Group Limited, Glencore, and British American Tobacco, among others.
“Investors can blend this ETF with existing ETFs to increase their exposure to dual-listed companies on the JSE. The higher exposure to Rand hedge stocks gives investors another option to diversify their local portfolios,” said Siyabulela Nomoyi, Quantitative Portfolio Manager at Satrix.
The index's weighting system, which caps single stock exposures at 10% and employs global free floats for market capitalisation calculations, ensures the index risk is not unduly concentrated to single stocks. This approach significantly elevates the Rand hedge potential of the ETF and affords investors a higher degree of protection against currency fluctuations and access to diversified revenue streams from its constituents’ international operations.
Adèle Hattingh, Business Development and Exchange Traded Products Manager at the JSE, has welcomed the listing of the Satrix JSE Global Equity ETF on the JSE, highlighting that it will enable South African investors to further diversify their portfolios.
“ETFs remain an excellent instrument for investors looking for long-term returns. The addition of the Satrix JSE Global Equity ETF on our Main Board offers local investors higher offshore earnings exposure and improved Rand hedging opportunity,” says Hattingh.
According to Satrix, in recent years, the methodology behind local equity indices, notably the ALSI, has led to a decrease in the weighting of inward-listed multinationals due to corporate actions and restructuring, thereby reducing their local index weight. This change has inadvertently increased the indices' sensitivity to South Africa's unique economic challenges, enhancing the risk profile for investors and their exposure to the volatility of the Rand.
Today’s listing increases the number of ETFs listed on the JSE to 98 with a market cap exceeding R156 bn.
