GLOSSARY

SATRIX 40 ETF

23 January 2017 By PDSNET

The Satrix Top 40 (STX40) is an ETF (exchange traded fund) that tracks the FTSE/JSE Top 40 providing exposure to the 40 largest shares, by market capitalisation, listed on the JSE.  The Satrix 40 ETF includes the 40 shares contained in the JSE Top40 index in the same proportions. The portfolio is re balanced every quarter in response to changes in the JSE Top 40. The most recent re balancing was done on 27th December 2018 in response to a quarterly review of the JSE Top 40. This ETF is dominated by a 22% holding of Naspers and an 11,13% holding of BHP. Both of these companies are largely invested outside of South Africa. BHP is an international commodities company whose profitability is a function of international commodity prices. Naspers is mostly a 31% stake in Tencent, a Chinese social media and gaming company. Buying an ETF is generally better than buying a general unit trust, because the dealing costs are far lower. The problem with investing in the Top 40 basket is that it contains a number of resource shares which can increase the risk. For a complete list of ETF's and what they offer go to https://www.etfsa.co.za/

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