• Cloud Atlas (RF) Proprietary Limited is considering winding up the ASBI ETF due to its failure to achieve the necessary scale for its investment objective and financial feasibility.
• The ASBI ETF remains under suspension from trading, and unitholders will be informed of any changes regarding the winding up process.
• Vunani Sponsors has been enlisted as the sponsor for the potential winding up of the ASBI ETF.

Cloud Atlas (RF) Proprietary Limited, the issuer of the Cloud Atlas Collective Investment Scheme in Securities’ S&P African Sovereign Bond ETF (ASBI ETF), has recently announced that the fund is under consideration for winding up. The decision comes as the ASBI ETF has failed to achieve the necessary scale required to meet its investment objectives and ensure financial feasibility.

Unitholders of the ASBI ETF were first alerted to the potential winding up in an announcement published on the Stock Exchange News Service (SENS) on April 24, 2023. The ETF has been experiencing a suspension from trading, leaving investors in a state of uncertainty about the fund’s future. Cloud Atlas (RF) Proprietary Limited has assured unitholders that they will be promptly informed of any updates regarding the winding up process as soon as more information becomes available.

The ASBI ETF, which is listed on the Johannesburg Stock Exchange (JSE) under the code ASBI and ISIN ZAE000297354, was established to provide investors with exposure to African sovereign bonds based on the S&P African Sovereign Bond Index. However, due to its inability to achieve the necessary scale, the ETF has fallen short of its intended investment objectives, leading to a reassessment of its future viability.

Cloud Atlas (RF) Proprietary Limited, the sponsor of the ASBI ETF, has expressed its commitment to addressing the concerns surrounding the fund and ensuring transparency throughout the winding up process. The company has engaged Vunani Sponsors as its sponsor to navigate the complexities associated with the potential termination of the ASBI ETF.

The decision to wind up the ASBI ETF highlights the challenges faced by investment vehicles in achieving the desired scale and financial sustainability. As the investment landscape evolves, fund managers and issuers face increasing pressures to meet investor expectations while delivering consistent returns. The fate of the ASBI ETF serves as a reminder of the importance of careful evaluation and due diligence in investment decision-making.