Satrix has just listed the 77th and 78th ETFs on the JSE and they are the first ETFs on the JSE that follow ESG (Environmental, Social and Governance) metrics and good investment practices.
Satrix, one of our ETF partners, is listing two brand new ETFs today, Thursday 10th September: the Satrix MSCI EM ESG Enhanced ETF as well as the Satrix MSCI World ESG Enhanced ETF. This will take the total number of ETFs listed on the JSE up to 78. With 8 issuers and the first ETF listing back in 2000 (the Satrix Top 40) the ETF industry keeps growing and offering more and more options.
You may be wondering what an ESG ETF is? ESG stands for environmental, social and governance. Both funds are designed to maximise exposure to positive environmental, social and governance (ESG) metrics. If you are looking for something with developed or emerging market equity respectfully, combined with a desire to invest responsibly, these ETFs will get you the best of both.
Here is a quick breakdown of environmental, social and governance metrics:
Environmental metrics cover themes such as climate risks, natural resources scarcity, pollution and waste, and environmental opportunities.
Social metrics include labour issues and product liability, risks such as data security, and stakeholder opposition.
Governance encompasses items relating to corporate governance and behaviour such as board quality, diversity and effectiveness.
On EasyEquities we have seen that ETFs account for more than 50% of the Assets Under Management, which is absolutely massive considering we have 500 000 clients. Speaking about stats, make sure to check out our own ETF site, where we cover the world of JSE-listed ETFs giving you the option to compare ETFs - EasyETFs.
The index for both funds is designed to maximize exposure to positive environmental, social and governance (ESG) factors, while reducing the carbon equivalent exposure to carbon dioxide and other greenhouse gases as well as their exposure to potential emissions risk of fossil fuel reserves by 30%. The index also aims to maintain risk and return characteristics similar to its underlying market capitalization weighted index.
Both of these new Satrix ESG ETFs will be available in your ZAR and TFSA account.
To invest and find out more about the Satrix MSCI EM ESG Enhanced ETF, click on the logo and fast fact section respectively below:
To invest and find out more about the Satrix MSCI World ESG Enhanced ETF, click on the logo and fast fact section respectively below:
Background: Exchange-traded funds (ETFs)
Exchange-traded funds (ETFs) are passively managed investment funds that track the performance of a basket of pre-determined assets. They are traded the same way as shares and the main difference is that whereas one share gives exposure to one company, an ETF gives exposure to numerous companies in a single transaction. ETFs can be traded through your broker in the same way as shares, say, on the EasyEquities platform. In addition, they qualify for the tax-free savings account, where both capital and income gains accumulate tax free.
Benefits of ETFs
- Gain instant exposure to various underlying shares or bonds in one transaction
- They diversify risk because a single ETF holds various shares
- They are cost-effective
- They are liquid – it is usually easy to find a buyer or seller and they trade just like shares
- High transparency through daily published index constituents
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