Gareth Stobie, the Managing Director of CoreShares, gave us an exclusive interview where he talked on the listing of the CoreShares S&P 500 ETF and CoreShares S&P Global Property ETF on both the SEM and JSE.
CoreShares, a leading passive investment management business in South Africa has launched two Exchange Traded Funds on the primary market of the Stock Exchange of Mauritius namely the CoreShares S&P 500 ETF and CoreShares S&P Global Property ETF. These are first ETFs tracking these S&P Dow Jones indices, across the African region, to be listed on the SEM. These ETFs have also been successfully listed on the Johannesburg Stock Exchange.
Very much so, Exchange Traded Funds have simplified the global mutual fund industry and have broadened the access. There are a number of factors driving demand:
According to ETFGI: ETFs/ETPs listed globally gathered a record amount of net inflows US$389.34 Bn in 2016 surpassing the prior record of US$372.27 Bn gathered in 2015. ETFs/ETPs assets reached a new high of 3.55 trillion US dollars at the end of 2016. Accordingly, global growth in this product type remains robust.
The S&P 500 index is without doubt the most recognized index in the world and represents the very origins of index investing. The index boasts very broad exposure to the US and global economy. Up until now the index hasn’t been available in ETF format on any African exchanges – this iconic investment strategy is now readily available in USD on the Stock Exchange Mauritius (SEM) to local Mauritian investors and in ZAR on the Johannesburg Stock Exchange (JSE) for South African investors.
The CoreShares S&P Global Property ETF tracks the S&P Global Property 40 Index, an index that tracks the performance of the 40 largest listed property stocks globally. The Global Property ETF has over 55% allocated to the US and exposure to 7 other developed regions and therefore offers good diversification benefits.
Both ETFs are competitively priced and are the first of their kind to list on the SEM.
Mauritius allowed us to list a product in USD which the local SA (JSE) market doesn’t yet facilitate. The market is ‘close to home’ and was relatively affordable with excellent service standards – making numerous aspects to the project manageable. Mauritius also meets a high governance framework which we were comfortable with.
Mauritius is already attracting a number of new listings and I am sure this will continue. I believe Mauritius could have a competitive advantage as relates to: service excellence, technology, robust governance and corporate affairs. Mauritius is not traditional know as a market with deep capital markets but there are a number of other areas where one can excel as an exchange and as a trading hub generally.