Exchange Traded Funds

Welcome to STANLIB ETFs

For many years there has been a debate waged about which investment strategy is best – active management or passive management. There has been no clear winner; each strategy has its advantages and disadvantages and may be the better strategy depending on prevailing market conditions.

What has become clear, however, is that these two approaches to managing assets are not necessarily exclusive of one another and are, in fact, complementary. While passive, index tracking products provide low-cost access to particular asset classes, the overall portfolio does benefit from an active strategy to asset allocation.

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What are Exchange Traded Funds?

An Exchange Traded Fund (‘ETF’) is a hybrid of a fund and a listed share that provides exposure to:

  • entire markets via market indices,
  • sectors of markets via sector indices, and
  • asset classes that are difficult to access.

ETFs are investment instruments that give investors the cost benefits of pooled investments and the convenience and tradability of listed shares. ETFs were first listed in the USA in the early 1990’s and have since become a global phenomenon, recently surpassing $1 trillion under management.

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Why STANLIB ETFs?

STANLIB Asset Management is well known for its actively managed Unit Trusts and has been a dominant player in that market for several years. However, STANLIB has also been involved with index tracking funds since 2000, and has steadily developed its expertise and capacity in this regard since then.

STANLIB currently offers two index tracking units trusts which compare very favourably with other index tracking funds in the market. We are therefore very confident that, by applying this same expertise to our ETFs, we will be able to offer very competitive listed index tracking products.

STANLIB, in co-operation with Liberty Group Holdings and Standard Bank, are in an ideal position to offer investors ETFs that are well managed, are able to achieve competitive expense ratios and that trade freely and at a fair price in the secondary market.

 

The STANLIB ETF Range

The ETF range consists of 3 funds, namely the STANLIB Top 40 ETF, the STANLIB SWIX 40 ETF and the STANLIB SA Property Fund.

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How to use ETFs in your portfolio

ETFs’ greatest strength is that they can be used for a wide variety of trading strategies.

  • Their low cost is ideal for buy-and-hold investors who are looking for long term asset growth and capital returns.
  • Their tradability is ideal for short-term traders who seek liquidity and certainty of execution
  • The fact that you can ‘short’ an ETF is attractive to more sophisticated investors, such as hedge funds.

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How to invest?

There are several ways in which to invest in STANLIB ETFs.

  1. JSE-member stock broker – as listed instruments, STANLIB ETFs are listed and trade on the JSE. This makes them freely accessible through JSE stockbrokers, which allows intra-day trading and a consolidated statement if the investor trades other shares on the JSE. Trading directly on the JSE is generally more cost-efficient for bigger value trades. For a list of JSE-member stock brokers, please click here. Each stock broker has its own minimum investment amounts and fee structure, so it is important to find the right broker for you.
     
  2. On-line Share Trading – this channel offers investors direct access to trading on the JSE via the internet. The fee structure is competitive, particularly for those who trade on a regular basis. 

    Auto Share Invest (ASI) and Linked Investment Service Providers – This channel allows investors to invest monthly in listed instruments.
 

Risks and Costs

The explicit costs of each fund are disclosed in the appropriate Program Supplement, while the on-going fees in the form of a Total Expense Ratio, are calculated quarterly and disclosed in the Fund Fact Sheet, available on this website and from STANLIB Collective Investments ('SCIL').

The risks associated with each ETF are disclosed in the Program Memorandum available from SCIL. However, the following points are worth noting:

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