Cloud Atlas Investing has listed its Africa-focused ETF on the Johannesburg Stock Exchange (JSE) at a NAV price of R11.86 per unit, Africa Global Funds has learned.

Cloud Atlas Big50 ex-SA ETF (exchange traded fund) is an investment product that invests in the 50 most representative companies across the African continent. 

Commenting on the listing, Maurice Madiba, CEO of Cloud Atlas Investing, said: “We want to provide investors across the globe with the cheapest, easiest way into stocks that are listed on African exchanges.”

“We are planning to raise ZAR500m by the end of the year. We do not have different plans for the funds, except for to create more units for the investors, ensuring we track the index with a very minimal tracking error,” he told Africa Global Funds.

When asked about benefits of investing, Madiba said that investors will get the opportunity to capture Africa’s growth. “African stocks are currently undervalued, something that is going to change with the improving economic conditions and investment levels. Investors who invest into the ETF at this stage will reap higher returns few years from now,” he said.

According to Madiba, the firm is targeting institutional investors in the initial stages of the listing, due to the long-term investment view required when going into African markets.
“We are also planning on a rigorous marketing exercise to bring in retail investors at a later stage,” he said.

“One of our founding principles is to allow Africans to participate in Africa’s growth story through stock markets, hence the drive to bring in all kinds of investors, including the high net worth and the ‘low’ net worth,” he added.

According to Cloud Atlas, the ETF manages liquidity in a unsurpassed manner, allowing an investor to get in and out of African exposure in approximately three days.

The Cloud Atlas Scheme deeds prevents the ongoing annual costs from exceeding 2%, and its expected TER is 1.16%.

The 50 companies in this ETF track the Cloud Atlas AMI Big50 ex-SA index (beta+), which is an enhanced index designed to maximize sector and country exposure.

Some of the companies in the index include Dangote Cement, East African Breweries, Safaricom, Guaranty Trust Bank, Global Telecom and Fan Milk to name a few.

“In our index, we include stocks listed on African exchanges that have been operational for more than 15 years and have more than 10 actively trading stocks,” explained Madiba. 

“The exchanges have to be members of the Africans Securities Exchanges Association, that way we ensure there is greater regulation on the part of the exchanges,” he added.

Cloud Atlas Investing will aim to cross-list Big50 ex-SA ETF on other exchanges in Africa. 

“This will give Africans across the continent easy access to the product on their more familiar exchanges,” said Madiba.