ETFSA has received the JSE approval of the first fully balanced actively managed AMETF to list on the JSE exchange.

The ETFSA Balanced Foundation Prescient AMETF, which is issued under the Prescient Manco license, allocates investment to all major asset classes: equities, both local and foreign; bonds; listed property and cash.

Mike Brown, Managing Director of ETFSA, said: “The ETFSA Balanced Foundation Prescient AMETF is designed for investors who seek a balanced approach to wealth accumulation. By blending stable income-generating assets with growth-oriented investments, both locally and abroad, it aims to achieve sustainable long-term returns, whilst mitigating downside risks.” 

“The fund will mirror the existing Wealth Default strategy run by ETFSA within it’s Retirement Annuity (RA) Fund, a fixed asset allocation strategy with scope for some flexibility, if required - hence the active component,” he added.

AMETF has a multi-asset framework that conforms fully with both the Regulation 28 Requirements of the Pension Fund Act, as well as Board Notice 90 of the FSCA that applies to the exposure requirements for a Collective Investment Scheme.

The ETFSAB has an expected TER (Total Expense Ratio) of approximately 0.52% which is lower than the typical balanced unit trust. This will appeal to investors seeking a cost-effective, multi-asset portfolio selection that is readily available on the market and which can form the foundation of many investments.

The JSE trading system, together with the appointed market maker for the ETFSAB, will enable the new product to be purchased or sold at any time during the JSE trading day.

The packaging of this balanced investment portfolio solution, as a Collective Investment Scheme listed on the JSE, brings strong regulatory control, compliance, and governance to investors.

The Balanced Foundation AMETF has a fixed asset allocation strategy to various asset classes. 

However in the event of regulatory changes such as Regulation 28 requirements or secular changes in markets, the asset allocation strategy can become more flexible to accommodate such events.

Gareth Stobie, ETFSA Director for Strategy and Corporate Development, commented: “This ETF compliments the work that ETFSA already fulfils within the ETF market, that of multi-manager and research leader but also as a specialised provider of clearly defined ETF portfolio solutions. Importantly, it will not impede our ability to objectively analyse the rest of the ETF market and to use all other building block products available”.

A key access point for the new AMETF is the ‘Investor Hub’, ETFSA’s own online digital platform for investors seeking to access to the ETFSA market through both a discretionary and Tax-free accounts.

“The product will form the ‘default’ option for our clients, particularly with a longer-term time frame, as it is strategically balanced across asset classes. It represents a core option for most investors,” said Nerina Visser, ETF Strategist at ETFSA.

The AMETF will be launched in partnership with Prescient Management Company. 

Kim Gibb, CEO of Prescient Manco: “We are delighted to be working with ETFSA, a firm that has been at the centre of the local ETF market development for over a decade. It further profiles our strong white label offering and this AMETF fills a structural gap in the market”.

The new security will start trading from August 26, 2024, during a “ramp up” or “offering period” and will be fully invested from September 2, 2024. 

As a listed security, the AMETF will be available via all JSE market participants, stockbrokers and investment platforms. 

ETFSA will be holding information webinars with the well-known investment platforms like Standard Online, FNB Securities, Easy Equities and others during the offering period, to inform investors of this new investment opportunity.