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The investment objective of the Satrix 40 ETF

A Fin24 user wants to know how much she could make if she invested on the Satrix 40 ETF. She writes:

I would like to invest R10 000 for five years. How much can I get back after five years?

Brett Landman of Satrix.co.za responds:

The investment objective of the Satrix 40 ETF, an equity investment, is to replicate or track the performance of the FTSE/JSE Top 40 Index as closely as possible.

The FTSE/JSE Top 40 index is comprised of the top 40 shares on the JSE by market capitalisation.

To track the index the Satrix 40 portfolio employs full physical replication and it holds all of the shares that comprise the index in the same weighting as they appear in the index.

Because of the costs incurred by the portfolio it is impossible to track the index perfectly.

Accordingly, the future performance of the Satrix 40 ETF will be determined by the performance of the shares held by the portfolio (as included in the index from time to time).

This performance is unpredictable and is subject to the vagaries of the equity market.

Although past performance is not indicative of future performance, had R10 000 been invested in the Satrix 40 ETF over the past five years (up to March 31 2014) the investment would now be valued at R26 069.74 (with all distributions reinvested).

As a high risk equity investment, an equity only fund (like the Satrix 40 ETF) has the potential for higher reward and vice versa.

- Fin24 
Do you have a pressing financial question? Post it on our Money Clinic section and we will get an expert to answer your query.

Disclaimer: Fin24 cannot be held liable for any investment decisions made based on the advice given by independent financial service providers.

Under the ECT Act and to the fullest extent possible under the applicable law, Fin24 disclaims all responsibility or liability for any damages whatsoever resulting from the use of this site in any manner.

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