Smart Cities ETF (JSE code: STXCTY)
Satrix is listing a Smart City Exchange Traded Fund (ETF) in July (currently in IPO).
The pandemic saw many people leave cities to live and work remotely, but cities still account for over half of the global population. The trend of urbanisation may have slowed, but it has not ended. Cities, and city life continue to be key attractions for people on the move.
Global urbanisation has been a long standing focus of my investing and it remains a long-term trend driving growth across diverse businesses – from food retail to mobile stocks and even banking. While my approach concerns the broad spectrum of urbanisation impacts, this ETF is focussed on cities of the future and the businesses directly involved in these future cities.
Cities of the future
Water, sanitation and clean energy will be key features of smart cities, as will infrastructure, communications and data. In view of this, the ETF includes technology stocks, industrial companies, transport, communications and energy. It also has a wide spread over 15 sub-sectors and across 51 countries of operation.
This diversity perhaps explains why the top 10 holdings make up less than 13% of the index. This includes stocks such as Palantir Technologies (focusing on big data), American Tower REIT (mobile towers) and Cisco (networking equipment).
Smart City ETF Top10 holdings
Smart City ETF Top10 holdings
This is a feeder fund using the iShares Smart City Infrastructure UCITS ETF (NYSE code: CITY). It will trade on the JSE in Rands and rebalancing will take place annually, in June.
The fund’s revenues are 76% from developed markets and 24% from emerging markets. Small-cap stocks are 18%, mid-caps 44% and large caps 38%.
Key dates for investors
- IPO opens: 28 June 2022
- IPO closes: Midday 14 Jul 2022 (not all brokers will offer the IPO)
- Listing: 26 July 2022
- Target TER: 0.6%
- JSE Code: STXCTY
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.
