What is Satrix 40?

A Fin24 reader asks:

Could you please update me about the Satrix 40? I want to invest some money in it but I have no information or statistics about it.

Brett Landman, CEO of the Satrix Exchange-Traded Fund (ETF), responds:

Satrix, which is a type of unit trust that enables investors to buy shares in the largest 40 JSE-listed companies, started in 2000 with the launch of the Satrix 40 Exchange-Traded Fund (ETF) as the first ETF to be launched in South Africa.

The largest 40 companies by market capitalisation are diverse across all sectors and the Satrix 40 endeavours to replicate the performance of the FTSE/JSE Top 40 index.

Satrix has expanded its range of ETFs to seven, offering broad market exposure in the form of Satrix 40, Satrix Swix, Satrix Divi and Satrix Rafi.

In August 2004, Satrix registered with the Financial Services Board as a collective investment scheme. This means that all Satrix securities are treated like unit trusts in terms of taxation, compliance, investment exposure and reporting. 

The Satrix 40 ETF has a market capitalisation of R6.8bn. Over the past 10 years to September 30 2011, the Satrix 40 ETF has returned 16.01%.

A current highlight is the performance of the Satrix Divi ETF over the past three years. It has delivered a return of 18.03% per annum. It replicates the performance of the FTSE/JSE Dividend Plus Index, which includes stocks based on a one-year forecast dividend yield rather than traditional market capitalisation, as is the case with the Top 40 Index.

Satrix ETFs can be bought through your stockbroker/online trading account. If you do not have a stockbroker, you can buy your Satrix shares through the Satrix Investment Plan.

 - Fin24