The Satrix FINI ETF (STXFIN*) tracks 15 locally listed financial companies, including all of South Africa’s major banks, life insurance providers and real estate investment trusts (REITs).
In June it is up some 15% and that after it was over 20% higher at one point. The driver here is two fold.
First local banks were extremely cheap with price-to-book sitting at 1x or lower and both dividend yields and PE ratios a little under 10x, extreme low valuations. Then the trigger was the GNU we saw as parliament was sworn in.
The FINI is weighted by market capitalisation and currently offers ±70% exposure to banks. Insurance is ±18%, financial services and REITs at ±9%. Yip it includes REITs with Nepi Rockcastle at 4.7% offering some Centeral and Eastern European property exposure (in Euros).
Usually a generous dividend payer the dividend yield has shrunk to around 4.0% as banks have run, but that’s still a chunky dividend which is paid quarterly (the April payment is small).
The latest Standard Bank trading update showed impairments increasing, but not markedly as with rates expected to start coming down in the second half of the year this pressure should ease.
The other reason for holding is that this is one of the purest SA Inc. ETFs and if the GNU can hold banks should do very well if the GNU leads to improved economic growth.
Simon Brown
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Unpacking the Satrix FINI ETF (data as of 25 June 2024)
| ETF name | Satrix FINI |
| JSE code | STXFIN |
| ETF issuer | Satrix |
| Issue date | 8 February 2002 |
| TER* | 0.42% |
| ETF benchmark | FTSE/JSE Financial 15 index |
| Tax-free savings | Investment allowed |
| Market cap* | R1,4billion |
| Performance | 1 year +20.7%
3 year +46.7% 5 year +9.9% 10 year +35.2% |
| Dividends yield | 4.0% |
| What we like | South Africa’s financial services sector is respected the world over. This ETF is an easy way to capitalise on that reputation. |
