The initial public offer for PropTrax is open from 9am on Monday, 13 August 2007 until 12 noon on Friday, 24 August 2007.

PropTrax is an exchange traded fund (ETF), or index tracking fund, which will track the performance of the FTSE/JSE SAPY index (South Africa’s listed property index). PropTrax will provide investors with exposure to the top 20 listed property companies which have a primary listing on the JSE Limited, as weighted by their market capitalisation.

This innovative investment product is managed by Property Index Tracker Managers (Proprietary) Limited, a joint venture between Madison Property Fund Managers and Diversified’s Fortress Asset Managers.

“The investment objective of PropTrax is to replicate, as far as possible, the price and yield performance of the index,” says Craig Hallowes of PropTrax. 

There are currently some 420 ETFs listed globally into which in excess of US$360 billion (R2,3 trillion) has been invested. They are regarded as low cost investment products providing access to specified classes of assets.

PropTrax is a passively managed investment fund, buying and selling securities with the aim of tracking the index. It will purchase and hold the actual securities comprising the index, in the correct proportions, to the extent possible. PropTrax will pay distributions to investors on a quarterly basis, with its year end falling on 30 June. This will include interest on distributions received by PropTrax from the constituent funds between distribution periods.

Sanlam Investment Management, which has been managing index tracking portfolios schemes since 1988 and currently has in excess of R18 billion of index tracking portfolios’ assets under management, has been appointed asset manager of PropTrax.

“PropTrax is a cost-effective investment in the real estate market. It provides an efficient way of gaining diversified equity market exposure at low costs while avoiding the costs and risks associated with active investment management,” explains Hallowes.

In terms of the initial public offer for PropTrax securities, the minimum unit of investment is R1,000. After listing, an investor will be able to purchase as little as one participatory interest on the secondary market.

Other benefits to investors offered by PropTrax include accessibility, liquidity, tight buy and sell spreads, diversification, transparency, flexibility and no prescribed fixed investment period. Hallowes believes it will also become a useful asset allocation tool for professional investors.

PropTrax is regulated in terms of the Collective Investment Schemes Control Act, 45 of 2002 and is bound by the provisions of the JSE Listings Requirements. The PropTrax JSE sharecode will be PTXSPY.

The PropTrax constituents below are extracted from the latest information provided by the JSE Limited available on 1 August 2007.

Constituent security                                       JSE Code                    Relative Weight

Growthpoint Properties Limited                        GRT                             21.49%

Fountainhead Property Trust                             FPT                             8.28%

Redefine Income Fund Limited                          RDF                             5.97%

Hyprop Investments Limited                             HYP                            5.96%

SA Corporate Real Estate Fund                        SAC                            5.86%

ApexHi Properties Limited - B units                  APB                             5.48%

Pangbourne Properties Limited                         PAP                             5.38%

Emira Property Fund                                        EMI                             5.15%

ApexHi Properties Limited – A units                 APA                            4.49%

Sycom Property Fund                                       SYC                            4.29%

Resilient Property Income Fund Limited            RES                             3.79%

Capital Property Fund                                      CPL                             3.58%

Acucap Properties Limited                                ACP                            3.03%

CBS Property Portfolio                                    CBS                             2.92%

Madison PFM Limited                    MDN                      2.23%

Vukile Property Fund Limited                           VKE                            2.12%

Premium Properties Limited                              PMM                           2.00%

Octodec Investments Limited                            OCT                            1.88%

Diversified Property Fund Limited                     DIV                             1.54%

ApexHi Properties Limited – C units                 AXC                            1.50%

iFour Properties Limit                                       IFR                              1.22%