Africa’s first property tracker fund lists on the JSE Limited

Posted On Tuesday, 25 September 2007 02:00 Published by
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Property Index Tracker Collective Investment Scheme in Securities, PropTrax, Africa’s first property tracker fund, successfully listed on the main board of the JSE Limited at the opening of trade on the 25th September

The PropTrax JSE sharecode is PTXSPY.

Managed by Property Index Tracker Managers (Proprietary) Limited, a joint venture between Madison Property Fund Managers and Diversified’s Fortress Asset Managers, PropTrax is an exchange traded fund (ETF), or index tracking fund, which tracks the performance of the FTSE/JSE SAPY index (South Africa’s listed property index). PropTrax provides 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.

PropTrax is one of some 420 ETFs currently 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 asset classes

“There has been a very positive response to PropTrax, even though it is a new product and ETFs are not all that familiar to retail investors. What is encouraging is the level of interest from individuals wanting to understand the product better and gain easy access to real estate in South Africa.” says Craig Hallowes, Director of PropTrax. 

The investment objective of PropTrax is to replicate, as far as possible, the price and yield performance of the index. “It is a cost-effective investment in the real estate market and 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.

“Between our brokers and ourselves, we have fielded an incredible number of calls,” explains Hallowes. “Not everyone has invested, but the message has been clear: South Africans are interested in real estate and the product is great in allowing them easy access to the market.”

The initial public offer (IPO) for PropTrax, secured a total commitment of about R300 million. “Over and above this we do anticipate new flows from certain institutions with whom we have been in discussions, in the months following listing,” notes Hallowes.

PropTrax is a passively managed Collective Investment Scheme, buying and selling securities with the aim of tracking the JSAPY 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 financial year- end falling on 30 June. This will include interest on distributions received by PropTrax from the constituent funds between distribution periods.

Other benefits to investors offered by PropTrax include accessibility, liquidity, tight buy and sell spreads, diversification, transparency, flexibility and no prescribed fixed investment period. PropTrax also has the potential to be a useful asset allocation tool for professional investors.

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 regulated in terms of the Collective Investment Schemes Control Act, 45 of 2002 and is bound by the provisions of the JSE Listings Requirements.


Publisher: PropTrax
Source: PropTrax

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