2. What are ETP’s?
• Exchange Traded Products are growing rapidly in popularity around the world because they make
investing simple and cost effective.
• Traditionally, investing on the share market has meant searching for individual shares or products like
unit trusts that, investors hope, will do better than the market. This is known as active investing. It
requires skill and that skill comes at a price. Strange as it may seem, it is this price that results in a
large number of actively-managed unit trusts underperforming, not outperforming, the market.
• When it comes to simplicity, one of the best investment portfolios you can own doesn’t try to pick the
winners, but invests in all the shares of a market index. For instance, it is possible for you to own the
top 40 shares on the Johannesburg Securities Exchange with one simple investment. Because there is
very little skill involved in investing like this, the costs are lower. Exchange Traded Funds are a
popular Exchange Traded Product. ETFs are low-cost unit trusts that invest in all the shares of an
index. Because they are traded on an exchange, you can buy or sell them whenever the market is
open. For your peace of mind, Exchange Traded Funds are subject to the regulations of the
Johannesburg Securities Exchange and Collective Investment Schemes. Exchange Traded Funds
don’t try to do better than the market, but because of their lower costs they often end up beating
the funds that try.
3. A lesson in simplicity
Making the market simple
Simplicity is our guiding principle. It is
fundamental to
successful investing.
4. WHO IS ITRANSACT?
Itransact is part of Automated Outsourcing Services (AOS)
One of South Africa’s Largest Independent Fund Administration Companies
Established in 1997
Assets Under Administration - 148bn ZAR
Administer over 215 retail & institutional funds for over 19 local and international
financial services companies
6. WHAT IS AN ETF
• ETFs are low-cost FSB regulated unit trusts that invest in the shares of an index and are listed
on the JSE (License required: 1.14 for CIS’s)
• An ETF tracks an index (like the Top 40 index) and its goal is not to outperform the index but merely
mimic its returns.
• There are many indices - Top 40 / Property / Bonds / Dividend / Resources/ Offshore and Financial
indices to name a few
• ETFs simply deliver the performance of the index. No more. No less
• ETFs are passively managed.
• ETFs don't try to pick the winners, they invest in all the shares contained in the index. (The haystack)
• ETF returns are not dragged down by the costs of active management such as trying to pick the
winners from the losers (Trying to find the needles)
7.
8. COSTS MATTER – WHO WANTS A SLICE OF YOUR PIE?
The average passively managed ETF Total Expense Ratio is below 0.35%
The average actively managed Unit Trust fund Total Expense Ratio is 1.48%
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20. KEY BENEFITS
• Accessible
Debit Order – R300.00 per month (JSE listed shares on a D/O basis)
Lump Sum - R5000.00
• Convenient
ETFs offer a perfect entry point for investors who wish to participate in the performance of the market
through a single, simple and cost-effective investment
• Low Cost
Due to ETFs being passive in nature, they tend to have a low fee structure than actively managed
funds
• Diversification
Instantly invest in a diversified portfolio with a single low cost investment
• Transparent
ETFs are listed securities and therefore their holdings and performance are disclosed daily
21. FINANCIAL ADVISOR SUPPORT
Online Servicing Portal Access your client’s investments with itransact
Access your personal financial advisor account with itransact
Website Product guide
Product notes
Fact sheets
Application forms
Fee Schedule
Independent research and information
Financial Advisor Support Centre Full contact centre service for Financial Advisor support
-Sales
-Training
-Information & Education
-Query Resolution
Telephone based Investor Support Centre Investor Statement Service
