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Sector Allocation
Management fees Maximum 0.30% (incl. in TER) Total expense ratio (TER) 0.39% p.a. Income distribution Quarterly in March, June, October and December Liquidity Intraday
ETFs are investment products used by investors for different purposes: 1. Passive asset allocation investments no active investment decisions are made within an asset class such as equities the portfolio is invested in line with a published benchmark such as the All Share Index or the All Bond Index. 2. Core-satellite equity investment strategy a fixed proportion of the portfolio is invested in an ETF which replicates the benchmark index to which the portfolio is mandated to perform. The satellites refer to active investment mandates that normally have higher return targets and higher risk allowances relative to the benchmark mandate. 3. Cash equitisation this is a quick and inexpensive way for an investor to get the desired exposure to an asset class or even a particular part of the market (such as Resources, Financials or Industrials), whilst deciding on a particular active investment strategy. 4. Ability to hedge particular exposures an investor with a strong relative view on a particular stock or sector, can exercise that view by taking the opposite exposure in a broadbased market ETF. For example, if an investor has a view that Resources stocks will underperform the rest of the market, he can sell Resources stocks, and buy an ETF on the broad market, thereby hedging himself against the overall market movement. Exchange Traded Funds (ETFs) provide very low cost investment opportunities in relation to comparable alternatives. Returns on the investment are supplemented by quarterly dividends that are payable to all investors. These dividends comprise all revenue earned from the underlying shares, less the net costs of managing the assets which are at or near to zero.
Risk and Return (% p.a.) since Dec-02 ETOP (Equally W'ted) Return: 18.6 Risk: 18.8 TOPI (Mkt Cap W'ted) Return: 17.8 Risk: 22.7
Dec-02 Dec-03 Dec-04 Dec-05 Dec-06 Dec-07 Dec-08 Dec-09 Dec-10 Dec-11 Jun-03 Jun-04 Jun-05 Jun-06 Jun-07 Jun-08 Jun-09 Jun-10 Jun-11
10 largest companies in TOPI by free float market capitalisation comparative weights of different indices (%)
Company BIL BHP Billiton AGL Anglo American SAB SABMiller SOL Sasol MTN MTN Group CFR Richemont SBK Standard Bank Group NPN Naspers ANG AngloGold Ashanti IMP Impala Platinum BBEWT40 (ETOP) 2.6 2.5 2.5 2.5 2.3 2.5 2.6 2.7 2.4 2.4 Top40 (TOPI) 14.0 10.9 9.2 6.4 6.2 5.8 4.2 3.9 3.4 2.7 CAPI40 (CTOP) 10.3 10.2 9.7 6.8 6.6 6.1 4.5 4.2 3.6 2.9 SWIX40 (DTOP) 6.8 5.3 5.9 7.8 10.1 2.8 5.1 4.8 1.7 3.3
Return and risk metrics for different Top40-based indices since Dec-02 (p.a.) BBEWT40 Top40 CAPI40 SWIX40 Total return (% ) 18.6 17.8 18.3 18.5 Risk (% ) 18.8 22.7 21.5 20.9 Risk-adjusted return 0.99 0.79 0.85 0.89 The role of investment banks as ETF issuers
Capitalising on the major trend of the separation of alpha and beta fund management, investment banks, due to their superior structuring and trading skills, are successfully entering passive fund management, including ETFs. The major cost advantage of ETFs over competing products also makes this one of the most attractive growth areas over the next decade in the investment industry. In addition, the development of the ETF industry internationally offers an excellent template of the dynamics and opportunity set for the domestic market. The research, structuring and trading skill set of investment banks, combined with their ability to develop value-adding trading/derivative products on the back of ETFs, places them at a significant advantage to traditional fund managers to develop beta fund management profitably.
of beta building block portfolios and funds offered by Beta Solutions in the Nedbank Capital Global Markets division. Our close affiliation to the Nedbank Group enhances our end-to-end operational abilities and allows us to leverage off the group synergies and reputation. We distinguish ourselves from our peers by the utilisation of a combination of existing and customised beta building blocks to derive lasting solutions for our clients. As a result we have a transparent and rules based passive fund management style. A combination of allocation to these products together with true alpha strategies allows for a significant level of tactical asset allocation possibilities for our clients.
Sector allocation
2011 Beta Solutions (Proprietary) Limited This document has been approved by Beta Solutions (Proprietary) Limited (Beta Solutions). It should not be considered as an offer or solicitation of an offer to sell, buy or subscribe for any securities or any derivative instrument or any other rights pertaining thereto (financial instruments). The information contained herein has been obtained from public sources and persons who Beta Solutions believes to be reliable. This document is not guaranteed for accuracy, completeness or otherwise. It may not be considered as advice, a recommendation or an offer to enter into or conclude any transactions. Securities or financial instruments mentioned herein may not be suitable for all investors. Securities of emerging and mid-size growth companies typically involve a higher degree of risk and more volatility than the securities of more established companies. Beta Solutions recommends that independent tax, accounting, legal and financial advice be sought should any party seek to place any reliance on the information contained herein or for purposes of determining the suitability of the products for the investor as mentioned in this document. Beta Solutions and its officers, directors, agents, advisors and employees, including persons involved in the preparation or issuance of this document, may from time to time act as manager or co-manager of a public offering or otherwise deal in, hold or act as market-makers or advisors or brokers in relation to the financial instruments which are the subject of this document or any related derivatives. Unless expressly stipulated as such, Beta Solutions makes no representation or warranty in this document. Neither Beta Solutions nor any of its officers, directors, agents, advisors or employee accepts any liability whatsoever, howsoever arising, for any direct or consequential loss arising from any use of this document or its contents. The information contained in this document may not be construed as legal, accounting, regulatory or tax advice and is given without any liability whatsoever. Past performance is no guarantee of future returns. Any modelling or back-testing data contained in this document should not be construed as a statement or projection as to future performance. This document is being made available in the Republic of South Africa to persons. All trademarks, service marks and logos used in this report are trademarks or service marks or registered trademarks or service marks of Beta Solutions. All trademarks, service marks and logos used in this report are trademarks or service marks or registered trademarks or service marks of Beta Solutions.
January 2012
Sector Allocation
Inner circle: FTSE/JSE All Share Index Outer circle: Nedbank Green Index Key Information Share code BGREEN ASISA Category Domestic Equity General Benchmark FTSE/JSE Africa All Share Index Risk L LM Medium to high (MH) M MH H
Management fees Maximum 0.75% (incl. in TER) Total expense ratio (TER) N/A Income distribution Quarterly in March, June, October and December Liquidity Intraday
Top 10 Holdings in the Nedbank Green Index with comparative index weights in other indices (%)
Company GFI Gold Fields EXX Exxaro Resources WHL Woolworths Holdings NED Nedbank Group REM Remgro BTI British Am. Tobacco PIK Pick N Pay BAW Barloworld MND Mondi Ltd OML Old Mutual NGRN 4.2 4.0 3.8 3.8 3.8 3.7 3.5 3.2 3.1 2.9 SRI (J100) 2.4 0.5 0.9 1.0 1.6 0.3 0.5 0.2 2.7 ALSI (J203) 1.9 0.4 0.7 0.8 1.3 1.7 0.2 0.4 0.2 2.2 SWIX40 (J400) 1.1 0.8 1.4 1.6 2.5 3.2
0.3 1.7
Risk and Return metrics for different indices since Jun-08 (p.a.) NGRN SRI (J100) ALSI (J203) SWIX40 (J400) Total return (% ) 13.9 2.9 5.9 6.2 Risk (% ) 21.0 26.1 23.6 23.5 Risk-adjusted return 0.66 0.11 0.25 0.26 Independent and credible data sources
The Nedbank Green Index is based on objective environmental credentials sourced from independent internationally credible sources, rather than a subjective opinion. It is built on the Carbon Disclosure Project (CDP) database and the UN-register of Clean Development Mechanism (CDM) projects in South Africa. The CDP is an independent not-for-profit organisation, based in the United Kingdom, which holds the largest database of corporate climate change commitment and action in the world. The CDP has 551 institutional investors as signatories representing over $71 trillion in assets under management. CDM projects based in South Africa are also incorporated into the rules-based methodology as these represent demonstrable commitments from companies to reducing their carbon impact and growing the Green Economy.
of beta building
block portfolios and funds offered by Beta Solutions in the Nedbank Capital Global Markets division. Our close affiliation to the Nedbank Group enhances our end-to-end operational abilities and allows us to leverage off the group synergies and reputation. We distinguish ourselves from our peers by the utilisation of a combination of existing and customised beta building blocks to derive lasting solutions for our clients. As a result we have a transparent and rules based passive fund management style. A combination of allocation to these products together with true alpha strategies allows for a significant level of tactical asset allocation possibilities for our clients.
Sector allocation
2011 Beta Solutions (Proprietary) Limited This document has been approved by Beta Solutions (Proprietary) Limited (Beta Solutions). It should not be considered as an offer or solicitation of an offer to sell, buy or subscribe for any securities or any derivative instrument or any other rights pertaining thereto (financial instruments). The information contained herein has been obtained from public sources and persons who Beta Solutions believes to be reliable. This document is not guaranteed for accuracy, completeness or otherwise. It may not be considered as advice, a recommendation or an offer to enter into or conclude any transactions. Securities or financial instruments mentioned herein may not be suitable for all investors. Securities of emerging and mid-size growth companies typically involve a higher degree of risk and more volatility than the securities of more established companies. Beta Solutions recommends that independent tax, accounting, legal and financial advice be sought should any party seek to place any reliance on the information contained herein or for purposes of determining the suitability of the products for the investor as mentioned in this document. Beta Solutions and its officers, directors, agents, advisors and employees, including persons involved in the preparation or issuance of this document, may from time to time act as manager or co-manager of a public offering or otherwise deal in, hold or act as market-makers or advisors or brokers in relation to the financial instruments which are the subject of this document or any related derivatives. Unless expressly stipulated as such, Beta Solutions makes no representation or warranty in this document. Neither Beta Solutions nor any of its officers, directors, agents, advisors or employee accepts any liability whatsoever, howsoever arising, for any direct or consequential loss arising from any use of this document or its contents. The information contained in this document may not be construed as legal, accounting, regulatory or tax advice and is given without any liability whatsoever. Past performance is no guarantee of future returns. Any modelling or back-testing data contained in this document should not be construed as a statement or projection as to future performance. This document is being made available in the Republic of South Africa to persons. All trademarks, service marks and logos used in this report are trademarks or service marks or registered trademarks or service marks of Beta Solutions. All trademarks, service marks and logos used in this report are trademarks or service marks or registered trademarks or service marks of Beta Solutions.