Coronation Fund Managers in entering the Actively Managed ETF (AMETF) space with a listing this morning to be followed by another six in the weeks ahead.
AMETFs are in some ways very much like the traditional ETFs we’ve had on the JSE for the last two plus decades. They are products trading on the JSE that hold assets within the ETF and we buy them in a JSE or tax-free account.
But there is a key difference, traditional ETFs follow a passive mandate whereby they track an index and only offer the return of the index less fess. AMETFs are as the name says, active in that the managers of the AMETF are making investment decisions based on what they think will be doing best.
Why is Coronation doing AMETFs?
Distribution. Up to now you’ve had to buy a Coronation unit trust on a LISP which required you to sign up and maybe pay platform fees. This works great, but having the Coronation funds also listed on the JSE means you get a whole new range of potential customers who may buy your product.
Can they go into a tax-free account?
Yes, as long as there is no performance fee.
What are they listing?
This morning (14 August 2024) they list the Global Strategic USD Income Prescient Feeder Actively Managed ETF (JSE code: COUSDI). The blurb says “Asset allocation across yielding asset classes globally with a US dollar bias” and the TIC is 0.89% +vat. I find no reference to a performance fee.
Next Wednesday (21 August 2024) there are two more coming;
- Coronation Global Managed Prescient Feeder Actively Managed ETF (JSE code: COGMAN) (moderate global allocation)
- Coronation Global Equity Select Prescient Feeder Actively Managed ETF (JSE code: COGES) (global equity)
Followed in the weeks after that with;
- Coronation Global Capital Plus Prescient Feeder Actively Managed ETF (conservative global allocation)
- Coronation Global Optimum Growth Prescient Feeder Actively Managed ETF (aggressive global equity)
- Coronation Global Emerging Markets Prescient Feeder Actively Managed ETF (emerging markets equity).
Thoughts?
Great to have new listing and an increasing range offered on the JSE and I like the ease of transaction. But as a rule I stay away fro active and want my ETFs to be properly passive. But they have an interesting offering, especially the offshore income with a US$ bias. This adds nicely to a diverse portfolio.
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.
