CoreShares launches ‘Smart Beta’ unit trusts

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CoreShares announced the launch of four new, low cost, unit trusts to the South African market. CoreShares is already well known within the Exchange Traded Funds (ETF) market, where its ETFs are traded on the Johannesburg Stock Exchange. These new funds will be specifically targeted at the financial advisor market and linked investment service providers (LISPs).

The four funds to be launched are:

  • CoreShares S&P SA Dividend Aristocrat Tracker Fund
  • CoreShares S&P SA Low Volatility Tracker Fund
  • CoreShares S&P SA Top 50 Tracker Fund
  • CoreShares Property Top Ten Tracker Fund

CoreShares already manages the above four index strategies in ETF format, with over R500mln under management, and is now making them available through the more ‘traditional’ unit trust structure. Three of the four funds are ‘Smart Beta’ meaning that they are not based on market cap alone but rather other investment principles or factors. The funds are all low fee with service charges between 0.2% and 0.425% (ex VAT).

Gareth Stobie, CoreShares
Gareth Stobie, CoreShares

Gareth Stobie, MD of CoreShares: “dividend and low volatility strategies have been hugely successful within the smart beta space – not only from a performance perspective but also from a perspective of gathering the most assets”. “This is because they fulfill a function and are outcomes orientated. They are intuitive and easy to understand”.

The key difference between the unit trusts and the ETFs already launched lies in the accessibility to existing distribution channels such as some LISPs which are mostly unable to host ETFs. Advisors will be able to use passive tools when providing advice. This drops the overall cost of investing for the client.

CoreShares continues to work extensively with S&P Dow Jones Indices – one of the world’s leading index providers.

Vinit Srivastava, Senior Director, Strategy and Volatility Indices, at S&P Dow Jones Indices, commented:  “South Africa is a key emerging market for investors and we are delighted to work with CoreShares to offer our indices to South African investors. We offer broad market benchmarks, from essential equity indices to innovative strategy indices which are fully investable and help bring greater transparency to the market and its investors.”

CoreShares will be working with wealth firms, discretionary fund managers and multi-managers in the distribution of the products. Retail investors will be encouraged to access the CoreShares strategies via ETFs.