What are some of the benefits of investing in Satrix securities?

Satrix securities allow an investor to invest in all the constituent stocks of a particular index through a single trade. Satrix securities are a cost efficient way of tracking an index. It is possible to buy and sell Satrix securities at any time that the JSE is open for trade. It is easy to invest your money and simple to realise your investment. You can calculate the value of your investment at any time. You are making an investment that has a history of beating inflation over the medium to long term.

How long does it take for me to receive my cash when I redeem my investment with the Satrix Investment Plan?

Satrix ETFs are securities listed on the stock exchange just like any normal share (for example Sasol). When you sell a listed security such as the ETF it takes 5 days for the transaction to settle from the date of trade. (this is the JSE’s settlement cycle for equities). The investment plan administration process needs an additional two days to do final bank transfers from where it will be transferred to the investor account. Therefore the terms and conditions stipulate a 7 business day period within which the proceeds of the redemption must be transferred to the investors bank account.

Is there an expiry or maturity date on Satrix securities?

No. As with equities, Satrix securities can be held in perpetuity.

How can I Invest in Satrix ETFs?

To invest in Satrix ETFs please refer to the Invest Now section of the website

Can I transfer between the two ETF platforms?

Satrix Investment Plan and SatrixNOW are completely independent platforms. Clients who wish to move their ETF accounts between platforms can contact for assistance.

What about taxes?

Income received by way of distributions is taxed in the hands of the investor. Income distributions comprise mainly actual dividends declared by the underlying constituents held in the portfolio. The dividends received by the portfolio are subject to dividends withholding tax at a South African rate of 20% for taxpayers that are not exempt in terms of the Income Tax Act. The dividends withholding tax will be deducted by the final regulated intermediary and paid over to SARS. Therefore distributions will be received by the investor net of dividends withholding tax.Distibutions also include interest and scrip lending income (if applicable), which will be taxed as normal income in the hands of the investor. Holders of Satrix securities will incur a Capital Gains Tax (CGT) liability on any capital gain realised at the time of sale.

What if I want to sell my Satrix investment?

Satrix securities are listed on the JSE and as such can be bought and sold through JSE stockbrokers during normal trading hours. The presence of market makers ensures that there should always be a price in the market at which to buy and sell your securities. If you own Satrix securities through the Satrix Investment Plan, simply call the Satrix helpline 0861 100 670. Alternatively you can instruct your broker to sell.

What is included in the distributions?

Distributions are portfolio income received less portfolio expenses. Portfolio income includes dividends received from underlying constituents of the portfolio, interest income and scrip lending income (if applicable). The portfolio costs include fees incurred to run the portfolio such as management fee paid to Satrix Managers, custodian fees, auditor fees, bank charges, brokerage and taxes.

How does my investment grow?

Any increase in the value of an index will result in capital growth for the Satrix security based on that index. In addition to this distributions are paid to investors except for Satrix RAFI where distributions are reinvested by the asset managers into the portfolio net of dividends withholding tax (investors however must account for such distributions for tax purposes because the distributions, prior to reinvestment, accrued to and were paid to investors).

Which Satrix product do I choose?

As Satrix Mangers (RF)(Pty) Ltd is not authorised to render financial advice and we accordingly cannot provide you with any financial advice. You can however contact an authorised financial advisor should you require assistance regarding the choice of the product (refer to the invest now section for more information on financial advice). You can however get product information in respect of the various Satrix products from the applicable pages on the website to assist you when making your decision.

Why does the Dividend Yield of a Satrix Security differ to that of the Index?

Because dividends are only paid monthly or quarterly from the respective portfolios, the dividend yield will not always match that of the underlying index (which adjusts its Dividend Yield daily based on dividends paid by its composite counters).

Why is the price of a Satrix Security not always 1/1000th of the Index Level?

Satrix securities represent an underlying basket of shares held by a portfolio managed by Satrix Managers. This means that dividends on those shares accrue to the portfolio and those dividends may ultimately be distributed to owners of Satrix securities. Satrix Managers arranges dividend distributions (together with interest thereon less portfolio costs) monthly or quarterly depending on the portfolio.This means that dividends paid into the portfolio will accrue during the period between distribution dates- thereby inflating the net asset value of the portfolio. This will be reflected in the price of a Satrix security, which will usually be at a slight premium to 1/1000th of the index level. Satrix Resi ETF price is 1/1000th of index level x 2.77536 adjustment factor.

Do I receive dividends (distributions)?

Yes. Distributions are made to holders of Satrix securities depending on the portfolio in which the investor hold securities. Satrix 40, FINI, INDI, RESI,SWIX and DIVI make quarterly distributions. Satrix RAFI declares distributions on a monthly basis, but all distributions are reinvested by the asset managers into the portfolio net of dividends withholding tax.

What will it cost to buy Satrix directly through the Investment Plan?

Transaction Fees Debit order fee: R0 Stock brokerage fees: 0.08% Nominal Strate and Investor Protection levies will also be charged All fees quoted are exclusive of VAT. VAT will be levied where applicable. Investment Plan Administration Fees (for both lump sums and debit order investments) Annual administration fee: (calculated daily and deducted quarterly) Total Investment Per FundFee R0 to R500 0000.60% R500 000 to R1 000 0000.45% R1 000 000 or more0.35% Transaction Fees Debit order fee: R0 Stock brokerage fees: 0.08% (buying and selling) Nominal Strate and Investor Protection levies will also be charged. Where a financial adviser is used, commissions will be charged (as scheduled in Section 8). All fees quoted are exclusive of VAT. VAT will be levied where applicable

How do I buy Satrix Securities?

Each Satrix product will have its own Initial Public Offering (IPO). Satrix 40

What is the price of a Satrix Security?

The value of a Satrix security will rise and fall in line with the relevant Index. The price of the Satrix security on the JSE will approximately reflect the index level divided by 1000. For example, if the Top 40 Index is at a level of 50,000 then the Satrix 40 security will be trading at approximately R50.00 or 5000 cents. The price of each Satrix product will be quoted throughout the JSE trading day and will be published daily in the newspapers under the Exchange Traded Funds sector of the JSE prices.

How do they work?

Satrix securities are listed securities that replicate the dividend and price performance of a particular index. They provide the same returns as would be received had the investor directly purchased shares in each company in the relevant JSE index. The JSE, in collaboration with FTSE, determine a number of indices which are used as barometers of the market (or sectors thereof).

What are Satrix Securities?

Satrix securities are listed securities that replicate the dividend and price performance of a particular index. They provide the same returns as would be received had the investor directly purchased shares in each company in the relevant JSE index. The JSE, in collaboration with FTSE, determine a number of indices which are used as barometers of the market (or sectors thereof).

Can I exchange Satrix securities for the underlying shares?

Yes.An investor can exchange, in the primary market, a minimum 1 million Satrix securities (and thereafter only in tranches of 1 million Satrix securities) for a proportional number of shares in the companies comprising the relevant index known as a redemption is specie. An investor can also deliver the underlying shares in exchange for Satrix securities know as a creation in specie(the underlying constituents of the portfolios and their weightings are displayed on the Satrix website daily). 

Who are the parties involved with Satrix?

Below is a list of credible institutions involved with Satrix: Central Securities Depository Participant (CSDP) - Institution established to hold securities and to affect transfer between accounts, typically by book-entry. Computershare - Transfer secretaries of Satrix securities. Satrix Managers is a wholly owned subsidiary of Sanlam Investment Holdings Limited. Deutsche Securities (Pty) Ltd Market - maker in Satrix products. AOS Contact Centre - Call centre operators for all Satrix Investment Plan related queries. Sanlam Investment Management (SIM) -Asset manager responsible for tracking the underlying index. Satrix Managers (RF) (Pty) Ltd - Management company for all Satrix trusts. STRATE - Electronic settlement system for transactions which take place on the JSE and off-market trades. Automated Outsourcing Services (Pty) Limited (AOS) - Administration of the Investment Plan is outsourced to AOS Standard Chartered Bank - Satrix Trustee Curo Fund Services Fund administration JSE Ltd Satrix funds are listed on the JSE and therefore adheres to regulations of the JSE Financial Services Board (FSB) - Satrix is licenced and regulated by the FSB

If the index changes does the constitution of the shares being tracked by the Satrix security change?

Yes. The constituent shares of the indices are reviewed on a quarterly, biannual or annual basis depending on the index. Any changes to the index will trigger a change to the underlying assets of the Satrix security in order to ensure continual alignment with the index composition. Also, if corporate events or capital awards change the components or weightings of an index, Satrix will immediately adjust its portfolio. This ensures exact tracking of the relevant index for Satrix security holders.

What are the risks?

As with any investment on the JSE, the return received is subject to fluctuations associated with market conditions. Investing in one share can be very risky. Spreading an investment portfolio over several shares can reduce this risk. Satrix securities offer investors this diversification without the associated additional costs of buying shares in several companies. However investing in equities can be risky. Therefore depending on the market movement one is not guaranteed to get back the initial amount invested when you do decide to sell.

How much can I invest?

If you invest with the Satrix Investment Plan you can invest a minimum lump sum of R1000 or a minimum debit order of R300 per month

Why is Satrix a Collective Investment Scheme?

In August 2004, Satrix registered with the Financial Services Board as a Collective Investment Scheme. This means that all Satrix securities are treated like Unit Trusts in terms of taxation, compliance, investment exposures and reporting. The fact that Satrix is both a Collective Investment Scheme as well as publically listed securities means that it adheres to the regulations and legislation of both the Financial Services Board as well as the JSE.

What are unit trusts?

A unit trust is a collective investment that enables you to pool your money with other investors in the portfolio with a specific investment objective. The portfolio is managed by the appointed asset or investment manager in a manner to achieve its chosen investment objective. Unit Trust provide investors exposure to portfolios over diverse asset classes and geographies. This includes a wide range of local and international shares or equities (companies listed on a stock exchange), bonds, property, money market instruments and their derivatives. The total value of the pool of invested money is split into equal portions called participatory interests of units (referred to as “units”). When you invest in unit trusts, you buy a share of the units of the total fund. The unit price (also known as the net asset value (NAV)) fluctuates daily as it is dependent on the market value of the instruments in which the pool of money is invested. The NAV price is calculated daily. Collective investments such as unit trusts are the most accessible, flexible, well regulated and transparent medium to long-term savings vehicles.

What are the benefits of investing in unit trusts?

Spread Risk By investing in unit trust (holding a pool of assets) investors risk is spread or diversified as the fund invests in a range of underlying assets, ensuring that all eggs are not in one basket. Assets that show a stable or better relative performance cushion the drop in price of other riskier assets. Therefore your investment won’t necessarily perform as poorly in a volatile market. Easy and accessible Unit trusts are a very convenient way of investing in markets which you otherwise would find difficult to access. At Satrix you can invest in unit trusts with as little as R500 per month (monthly debit order) or a R10 000 lump sum. Good returns History proved that the average returns of unit trust compare favourably with returns from more traditional investment products. The longer your period of investment, the greater the opportunity for growth. You always know how much you own The NAV prices of units are quoted daily in the national press, and can also be obtained directly from the unit trust company. You can calculate the value of your investment at any time by multiplying the number of units you own by the NAV price of your fund. Easy access Unit trusts are liquid so you can cash in all or part of your investment at any time and have ready access to your money.

How can I buy Satrix Unit Trusts?

You can purchase the Satrix Unit Trusts directly via the manco (Satrix Managers (RF)(Pty) Ltd); or through select LISPs (Linked Investment Service Providers).

What is the minimum investment?

You can either invest a lump sum amount so that your entire investment immediately benefits from the growth and income potential of the chosen unit trust, or you can make a regular monthly investment, an easier way of building up capital. The latter smoothes your investment into the market over time (called rand cost averaging) rather than being affected by a market movement at a particular time. Unit trusts are also transferable and you can invest in somebody else's name.

Why should I purchase passive Unit Trusts?

A passive unit trust is an ideal savings product for individuals that wish to put away lump sum or regular monthly amounts A passive Unit Trust is ideal for investors that wish to hold long-term exposure to an index Unit trusts are liquid so you can cash in all or part of your investment at any time and have ready access to your money.

How is my investment protected?

Your money is held separately from the manco's assets in "trust". If anything goes wrong with the company, your money is safe. The local industry is also strictly regulated by the Registrar of Collective Investment Schemes, a department of the Financial Services Board, and each collective investment portfolio company's appointed independent trustees have oversight over and protect your investment. A vigilant financial press and analysts who continuously monitor the performance of the industry also protect you. In addition, you receive optional quarterly reports and an annual report listing all the assets in which your unit trust invests.

Can I invest in Unit Trusts on behalf of my children?

Yes. You are able to open the unit trust account in the minor's name. As the parent or legal guardian, you will be required to sign all documentation until the minor reaches the age of 21. The unit trusts are legally the property of the minor. Alternatively open the account in your own name and manage it on behalf of your child. Investors who choose to do this often ‘name’ the unit trust account using the facility available, after the child in question. *The annual service fee (also referred to as a service charge) covers ongoing portfolio management and administration expenses (i.e. operating expenses). ** Daily unit price is also referred to as the NAV (net asset value) price.

How can Unit Trusts make money for investors?

Capital growth: The value (price) of the shares or underlying assets may increase and may be sold for more than the price at which they were bought. Income: The underlying assets may earn interest or dividends. The interest and dividends earned by units may be paid out to investors or may be reinvested in the fund, thereby increasing the number of units owned by the investor. Unit trusts can, however, lose money if the prices of the underlying assets fall. As such, it is best not to invest in unit trusts using money that may be needed at short notice. This is because investors who have no choice but to sell units when the money is needed may realise a loss if the market – and therefore their unit trust investment– is down.