New exciting Satrix ETF I'll be adding to my trading arsenal
Q “Last Wednesday you mentioned the 5 Satrix ETFs you're mainly trading. I saw that recently they launched another Satrix ETF called the CAPI… Can you please explain what the ETF does and if you're looking at trading it in the future?”
A. Yes, most definitely.
As soon as the CAPI is available to trade on the trading platform and there is high volume of buying and selling, I will be adding it to my trading arsenal.
The Satrix Capped All Share Index (CAPI), is an ETF that is tracked by the FTSE/JSE All Share Index.
It will give traders extra exposure to the full universe of large, mid and small cap listed South African companies.
I'm talking about multinational companies like BHP Group, Naspers, Prosus, Richemont etc… It will also include the Top 40 JSE index.
The CAPI Satrix ETF is set to provide and deliver a more stable return due to the improved diversification and capping limits.
For example. Each individual share in the index is capped at 10% to limit too much exposure to any share.
This means, there is a lower risk in case any one company moves up or down too much.
I'll be adding the CAPI Satrix ETF into my trading arsenal for not only my trading, but also for Red Hot Storm Trader.
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“I heard that Old Mutual has unbundled their shares with a bank and shareholders are now owning shares in another company, due to it. Can you share any information about this?”
Last week, Old Mutual (OMU) unbundled all of their Nedbank Ltd shares that Old Mutual Emerging Markets held.
If you saw the share price, OMU closed down 13.2% lower and Nedbank’s share price fell 2.27%.
Each OMU shareholder received 1.31 Nedbank Ltd shares for every 100 OMU shares held.
This means, if you owned 100 Old Mutual shares, you would now find you have 1 Nedbank share in your portfolio.
On the other hand, if you’re a trader and were long (bought) OMU, the price would have most likely hit your stop loss due the increased volatility.
Right now, OMU and Nedbank are financial markets that I’ll be avoiding for the next couple of weeks, until the dust settles.
Analyst, Red Hot Storm Trader