In a significant development on the Johannesburg Stock Exchange (JSE) today, the Satrix Collective Investment Scheme announced the partial delisting of its STXRAF securities. This move comes as the result of the redemption of 2 STXRAF baskets, leading to the removal of 400,000 securities from the market. The decision highlights the scheme’s proactive approach to portfolio management and investment optimization.
STXRAF, identified by the JSE code, represents the Satrix RAFI 40 portfolio, which is among the preferred choices for investors seeking diversified exposure to 40 prominent companies listed on the JSE. The portfolio follows a smart-beta investment approach, utilizing the Research Affiliates Fundamental Index® methodology to select its constituent companies based on fundamental factors such as sales, dividends, cash flow, and book value.
|Portfolio Name||JSE Code||ISIN|
|Satrix RAFI 40||STXRAF||ZAE000126033|
The partial delisting of 400,000 STXRAF securities raises important considerations for investors and the broader market. With the removal of these securities, the total number of STXRAF securities in circulation now stands at 58,477,270. This reduction may potentially impact supply and demand dynamics, affecting the ETF’s market price and liquidity.
The Satrix Collective Investment Scheme, registered as such in terms of the Collective Investment Schemes Control Act, 45 of 2002, actively manages its investment offerings to deliver optimal returns for its investors. The recent redemption of STXRAF baskets aligns with the scheme’s commitment to adapt its investment strategy in response to changing market conditions.
While the exact reasons behind the redemption and partial delisting were not disclosed in the announcement, such actions are not uncommon in the investment landscape. Funds often redeem ETF units to meet investor requests for withdrawals or to adjust the fund’s exposure to certain assets.
The table below outlines the key details of the partial delisting:
|Delisting Date||Number of Securities Delisted||Remaining STXRAF Securities|
|19th July 2023||400,000||58,477,270|
The decision to delist a significant number of STXRAF securities may prompt investors to reevaluate their portfolios and consider the potential implications on their investment strategies. With a reduced supply of STXRAF securities, demand may surge, leading to increased price volatility and a potential premium over the net asset value (NAV) for those looking to purchase the ETF.
On the other hand, existing investors may face challenges in liquidating their positions swiftly, especially during periods of high market volatility, as the liquidity of STXRAF securities could be impacted by the reduced number in circulation.
As the JSE Sponsor for this delisting, Vunani Sponsors played a crucial role in overseeing the process, ensuring adherence to regulatory requirements and facilitating a smooth and efficient execution. The company, renowned for its expertise in providing sponsor services to JSE-listed entities, helped navigate the complexities of the delisting procedure.
Investors and market participants are advised to exercise prudence and closely monitor developments surrounding STXRAF securities in the wake of this partial delisting. Staying informed about potential market shifts and consulting with financial advisors can aid investors in making well-informed decisions during times of change.