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CoreShares announced the imminent listing of two global ETFs, the CoreShares S&P500 ETF which tracks the iconic S&P 500® index and the CoreShares S&P Global Property ETF which tracks the S&P Global Property 40 Index, an index that tracks the performance of the 40 largest listed property stocks globally. Both ETFs will be listed on the JSE with a management fee of 0.45% and 0.50% respectively.
Gareth Stobie, MD of CoreShares: “The S&P 500 index is without doubt the most recognized index in the world and represents the very origins of index investing. The index boasts very broad exposure to the US and global economy. We are delighted to be broadening our local suite of ETFs to include global exposures”.
CoreShares will accept investments into the funds through a book build on the 24th and 25th of October ahead of an anticipated listing on the 4th of November. Investors will access the ETFs on the JSE in Rands however, the return profile of the ETFs will track the global currencies in which the indexes are based and the returns of those indexes. Accordingly the products offer not only a Rand hedge but also global diversification for local investors. Investors will not need to apply for an offshore allowance in order to buy the ETFs.
Top 10 holdings as at 30 September 2016:
|CoreShares S&P500 ETF||CoreShares S&P Global Property ETF|
|Apple Inc.||3.25%||Simon Property Group A||9.07%|
|Microsoft Corp||2.40%||Public Storage||4.66%|
|Exxon Mobil Corp||1.93%||ProLogis Inc||3.98%|
|Amazon.com Inc||1.76%||Welltower Inc||3.76%|
|Johnson & Johnson||1.74%||Unibail – Rodamco||3.75%|
|Facebook Inc A||1.60%||Mitsubishi Estate Co||3.67%|
|Berkshire Hathaway B||1.46%||AvalonBay Communities Inc||3.45%|
|General Electric Co||1.42%||Sun Hung Kai Properties Ltd.||3.40%|
|AT&T Inc||1.34%||Ventas Inc||3.36%|
|JP Morgan Chase & Co||1.29%||Equity Residential||3.33%|
The S&P500 has enjoyed increased investor support over recent years with one of the world’s most successful investors Warren Buffett amongst the list of global thought leaders endorsing the strategy (and passive more broadly). In 2014 he commented as follows in relation to his estate: “My advice to the trustee couldn’t be more simple: Put 10% of the cash in short-term government bonds and 90% in a very low-cost S&P 500 index fund. (I suggest Vanguard’s.) I believe the trust’s long-term results from this policy will be superior to those attained by most investors — whether pension funds, institutions or individuals — who employ high-fee managers.”
The Global Property ETF has over 55% allocated to the US and exposure to 7 other developed regions and therefore offers good diversification benefits relative to other JSE listed ‘Global’ property companies.
The two ETFs are well placed as building blocks for investors wanting to structure a diversified portfolio on the JSE. In order to participate in the initial offering, investors should speak to their stock broker or visit their online platform for more detail.