The Absa Capital S&P GIVI Financial 15 ETF is a strange beast. While the name creates the impression that the ETF is invested exclusively in South Africa’s world-class banking and financial services sector, the ETF also includes a fair but of real estate investment trust (REIT) investments. Banks and life insurance companies are also represented in this ETF.
This ETF is weighted by a combination of low volatility and the intrinsic value of its constituents. The brick and mortar nature of property investments might speak to the ETF’s low volatility. With brick and mortar assets and the potential for steady rental income, an index that aims to lock out volatility could do worse than property.
Companies are only included if they have a market capitalisation (number of shares times by the share price) of R10bn. In addition, the companies in the index must trade an average of R15m per day. The index excludes preference shares, typically issued by banks.
Despite the ETF’s 26.6% real estate exposure, Investec, Nedbank, Old Mutual and Remgro together account for nearly 42% of what remains, which excludes a 6% Investec PLC holding. That leaves less than 30% for other financial players. If you’re hoping for exposure to the banking sector, best keep looking.
|ETF name||Absa Capital S&P GIVI Financial 15 ETF|
|ETF issuer||Absa Capital|
|Issue date||15 June 2009|
|ETF benchmark||S&P GIVI SA Financials Index|
|Tax-free savings account||Investment allowed|
|ETF major holdings||Download the full list here: GIVI SA Fini 15 ETF|
|Performance||1 year -12.7%
3 year -20.4%
5 year -36.6%
10 year +42.3%
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