Nasdaq100
The current Satrix Nasdaq 100 ETF (JSE code: STXNDQ) is that of a feeder fund and Satrix wants to change it to be a standard fund.
A feeder ETF is when the issuer simple uses another ETF as the asset held within the ETF. Up until now Satrix has used the iShares Nasdaq 100 UCITS ETF and the logic is that not only is it easy, but it’s also cheap. Especially when initially listing an ETF.
But then the ETF grows in size (STXNDQ is now +R5billion) and it starts to make economic sense to actually manage the fund yourself. It’ll have the same ultimate stocks with the same weightings, but rather than just buying the offshore ETF they buy the individual shares.
The key point is that the TER will drop from the current 0.48% to an expected 0.42%, so a small saving every year for investors.
If you hold the ETF yo should have received a ballot form from your broker, if not contact them and ask for it.
You have until 27 September to submit your ballot and if approved the change will take effect from the end of October. The code and tax-free statutes will remain unchanged.
My take is easy, cheaper is always better so I like the change.
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ETF blog
At Just One Lap, we are big fans of passive investment using ETFs. In this weekly blog, we discuss ETFs on the local market and the factors you need to consider when choosing an ETF. If you have wondered how one ETF differs from another, this is where you can find out. We explain which index each ETF tracks, what type of portfolio could benefit from holding each ETF, and how the costs will affect your bottom line.
