Simply put – instead of investing in an emerging market, ETF this investment is much better.
In the image above you can see that the emerging market ETFs mainly track shares in China, Korea, Taiwan, India, and Brazil (total of 71% of the total investment).
The investments the ETF’s are invested in are companies like Alibaba, Samsung Electronics, China Construction Bank, Ping An Insurance and China Mobile.
By sector, the investments make out 26.4% in the IT industry, 23.26% in Financials, and 10% in Consumer products. The remainder is in materials, energy, industrials, telecoms, health care, and real estate.
How do you invest in this?
The Investec Digital Plus ESP will be listed on the JSE, the same, as an ETF will be.
The product will trade on the JSE after 13 April 2018, with the share code SPIB22.
The maturity date at which payout is made (or capital protection applied) is 28 September 2021.
There are no fees for the product that you need to worry about, these are all built into the option structure Investec used – and by applying dividends from the index toward covering fees. In total, the dividends for the 3.5 year period will come out to somewhere around 5%. So you aren’t losing much with the dividends going toward fees.
Investec will also be the market maker for the share and will offer a 1% bid spread to buy it from you if you don’t want to hold on the full 3.5-year period.
Perhaps the only negative is that the minimum initial investment prior to listing is R50,000.
If that’s more than you want to invest you can try picking up some of the shares post listing if investors want to sell later on.
Here’s to unleashing real value