Port-Louis Mauritius 3 May 2016. CoreShares, a leading passive investment management business in South Africa has announced the launch of CoreShares S&P 500 ETF (Exchange Traded Fund) and CoreShares S&P Global Property 40 ETF. These will be the first ETFs tracking these S&P Dow Jones indices, across the African region, to be listed on the primary market of the Stock Exchange of Mauritius. A secondary listing of the ETFs is planned for the JSE.
The CoreShares S&P 500 ETF will track the Vanguard S&P 500 ETF which invests in stocks of the S&P 500 Index, representing the top 500 U.S. listed companies. The objective of this fund is to closely track the index’s return, which is considered a gauge of overall U.S. stock returns.
The S&P 500 index was the first US market-cap weighted stock market index with over USD 7.2trn benchmarked to the index, with index assets comprising approximately USD2.2trn. The growth perspective of the US economy is looking positive, which according to the World Economic Outlook Projections’ is predicted to grow at an annualised rate of 2.7% for 2016. This makes the prospective of investing into ETFs which track the S&P 500 appealing for investors.
Passive Index investing in the S&P 500 has gained broad popularity after the most famous of investors recently endorsed the strategy.
“My advice to the trustee could not be more simple: Put 10% of the cash in short-term government bonds and 90% in a very low-cost S&P 500 index fund…I believe the trust's long-term results from this policy will be superior to those attained by most investors – whether pensionfunds, institutions or individuals – who employ high-fee managers” –Warren Buffett
The CoreShares S&P Global Property 40 ETF will track the performance of the leading 40 global property companies from 8 different countries. The constituents of the index are large, well-traded, liquid property companies from North America, Europe and Asia Pacific currently trading on the developed market exchanges.
Commenting on this launch, Gareth Stobie, Managing Director of CoreShares said “Through these ETFs, we are granting access to the S&P Dow Jones indices to local individuals and institutional investors. The S&P 500 is probably the most accurate quantifier of the U.S. economy and the S&P Global Property gives access to the buoyant international property market.’’ Gareth also mentioned that “The Mauritian jurisdiction offers a solid platform for expansion on the continent - a strong services sector couple with robust governance structure’’.
Zack Bezuidenhoudt, Head of Client Coverage, South Africa and Sub-Saharan Africa, at S&P Dow Jones Indices, said “Today’s announcement is yet another milestone in the development of Africa’s financial market. S&P Dow Jones Indices is proud to be a catalyst for the continuing expansion and robust growth of Africa’s index investment landscape. Our licensing agreement with CoreShares means that for the first time, African investors will be able to directly track the returns of the large cap U.S. equities market and global property companies whilst gaining an important diversification tool for their portfolios.”
CoreShares will be the CIS Manager, MCB Stockbrokers Ltd will act as Market Maker and Cim Fund Services Ltd will be the Administrator and Transfer Agent.