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Ballot Voting Procedure - Proposed Amalgamation of the STXMAG ETF with the STXGLB ETF
Satrix Managers (RF) Pty Ltd
Satrix Multi Asset Passive Portfolio Solutions Growth ETF
Share code: STXMAG
ISIN: ZAE000318341
A portfolio in the Satrix Collective Investment Scheme in Securities
2, registered as such in terms of the Collective Investment Schemes
Control Act, 45 of 2002
Ballot Voting Procedure - Proposed Amalgamation of the Satrix Multi
Asset Passive Portfolio Solutions Growth ETF with the Satrix Global
Balanced Fund of Funds ETF
This letter is important and requires your immediate attention.
The purpose of this letter is to inform you of the proposed
amalgamation of the Satrix Multi Asset Passive Portfolio Solutions
Growth ETF (source portfolio) with the Satrix Global Balanced Fund of
Funds (targeted portfolio) and to provide you with sufficient
information to vote on this proposal – including your rights as an
investor and the impact this will have on your investment.
In terms of Section 99 of the Collective Investment Schemes Control
Act, 45 of 2002 ("the Act"), the proposed amalgamation will proceed
if the majority of investors vote in favour of the amalgamation by
way of the enclosed ballot. Absence of a response will be regarded as
a vote in favour of the amalgamation.
The amalgamation ballot is conducted at the request of Satrix Managers
(RF) (Pty) Ltd ("Satrix"), FSP 15658, the manager of the Satrix
Collective investment Scheme in Securities and the Satrix Collective
Investment Scheme in Securities 2.
Reason for the Proposed Amalgamation
Satrix intends to amalgamate the Satrix Multi Asset Passive Portfolio
Solutions Growth ETF (JSE Code: STXMAG) ("Satrix MAPPS Growth ETF"),
previously known as the "NewFunds Multi Asset Passive Portfolio
Solutions Growth Exchange Traded Fund Portfolio", into the Satrix
Global Balanced Fund of Fund ETF ("Satrix Global Balanced FoF ETF").
The Satrix MAPPS Growth ETF is designed to give investors exposure to
the South African market through investments in equities, government
bonds, inflation-linked bonds, and cash. This ETF is suitable for
investors with a longer time horizon due to its higher equity
allocation.
The current asset allocation for the Satrix MAPPS Growth ETF is:
Asset Class Weight %
SA Equity 75%
SA Government Bonds 10%
SA Inflation-linked 10%
Bonds
Local Cash 5%
In contrast, the Satrix Global Balanced FoF ETF aims to provide local
investors with exposure to a diversified global basket of ETFs, priced
in ZAR. This ETF covers a broader range of markets, sectors, and asset
classes, thereby potentially reducing the risks associated with
investing in a single country, although introducing foreign currency
exposure risks.
The Satrix Global Balanced FoF ETF tracks the Satrix Global Balanced
Index as closely as possible. The current asset allocation for the
Satrix Global Balanced Index is:
Asset Class Benchmark Index Weight
%
Developed Equity MSCI World 45%
Global Bonds Bloomberg Global Aggregate 15%
Global Infrastructure FTSE Global Core 10%
Infrastructure
Emerging Equity MSCI Emerging Markets 10%
Global Inflation-Linked Bonds Bloomberg US Government 5%
Inflation-Linked Bond
Global Credit Markit iBoxx USD Liquid 5%
Investment Grade 0-5
Global Reits FTSE EPRA/NAREIT Developed 5%
Global Cash Secured Overnight Financing 5%
Rate (SOFR)
Performance Comparison
Since its listing in May 2011, the Satrix MAPPS Growth ETF has
struggled to deliver returns above SA CPI+5%. In contrast, the Satrix
Global Balanced Index offers the potential for CPI+5% and higher
returns, as shown by cumulative returns since 2011.
Further analysis of 12, 36, and 60-month rolling returns reveals that
the Satrix MAPPS Growth ETF ("STXMAG") only outperformed CPI+5% less
than 40% of the time across all these periods. Conversely, the Satrix
Global Balanced Index consistently outperformed SA CPI+5% more than
60% of the time across the same periods.The graph below shows the 60-
month rolling returns, this illustrates the Satrix Global Balanced
Index achieving returns in excess of SA CPI+5% in comparison to STXMAG.
Currency fluctuations, particularly the volatility of the South
African rand, were also considered. The Satrix Global Balanced Index
outperformed CPI+5% over 90% of the time in weak currency
environments, demonstrating its potential for higher returns and
better protection against local inflation compared to STXMAG. Even in
strong currency environments, it still outperformed CPI+5% more
consistently than STXMAG over longer periods.
The following tables illustrate the outperformance of the ETFs against
CPI+5% during weak and strong currency periods:
Rolling Returns vs CPI+5%
Outperformance % (Weak Currency) 12 Months 36 Months 60 Months
Satrix MAPPS Growth ETF 31.03% 87.50% 63.16%
Satrix Global Balanced Index 93.10% 100.00% 100.00%
Rolling Returns vs CPI+5%
Outperformance % (Strong Currency) 12 Months 36 Months 60 Months
Satrix MAPPS Growth ETF 48.28% 8.33% 0.00%
Satrix Global Balanced Index 17.24% 20.83% 57.89%
Although the Satrix MAPPS Growth ETF has provided returns above CPI
for investors, amalgamating it into the Satrix Global Balanced FoF
ETF offers several advantages:
• By investing globally, investors are able to spread their risks
across multiple economies, which has the potential to enhance
the stability and performance of their portfolio.
• Access to a wider range of asset classes and investment
strategies globally.
• Investors can achieve returns in excess of CPI+5% without taking
concentrated risk in one country.
• Lower cost: The TER of the Satrix Global Balanced FoF ETF is
0.35% compared to the TER of 0.40% for the Satrix MAPPS Growth
ETF.
The table below lists the investment policies of both ETFs:
Satrix MAPPS GROWTH ETF Satrix Global Balanced Fund Changes and
of Funds ETF impact
Investment Policy Investment Policy Change due to
4.1 The investment policy 3.1 The investment objective amalgamation
of the Portfolio shall be to - of the Portfolio shall be to
4.1.1 track the Index as track the Satrix Global
closely as possible, to the Balanced Index (hereinafter
fullest extent possible: referred to as "the Index")
as closely as possible, by
4.1.1.1 buying only securities predominantly investing in
in the weightings in which they participatory interests or
have been included in the any other form of
Index; and participation in offshore
4.1.1.2 selling only securities listed exchange traded funds
which are excluded from the which each individually track
Index from time to time as a a component of the Index. The
result of the quarterly Index underlying exchange traded
reviews or corporate actions, funds invest in a diversified
so as to ensure that at all blend of international asset
times the Portfolio holds classes, including, but not
constituent securities in the limited to, equities, bonds,
same weightings as they are inflation-linked bonds,
included in the Index; and credit, listed property and
listed infrastructure
4.1.2 as a further objective, securities.
to manage the securities held 3.2 Where the aforementioned
by the Portfolio to generate exchange traded funds are
income for the benefit of operated in territories other
investors. than South Africa,
participatory interests or
4.2 The Portfolio shall not any other form of
buy or sell securities for the participation in these
purpose of making a profit nor exchange traded funds will be
for any purpose other than included in the Portfolio
tracking the Index. only where the regulatory
environment is, to the
4.3 Investors may obtain satisfaction of the Manager
participatory interests in the and the Trustee, of a
Portfolio on the secondary sufficient standard to
market or by subscribing for provide investor protection
new participatory interests in at least equal to that in
the Portfolio on the primary South Africa.
market. In order to achieve 3.3 The Portfolio may also
this objective the manager may, utilise listed and unlisted
subject to the Act and the Deed, financial instruments, for
create and issue an unlimited the purposes of hedging
number of participatory exchange rate risk, and may
interests in the Portfolio. hold assets in liquid form
from time to time. It is
4.4 The Portfolio will be anticipated that assets in
passively managed in that the liquid form will not form a
manager will not buy and sell substantial part of the
securities based on economic, Portfolio's assets.
financial and/or market 3.4 The Portfolio shall not
analysis but rather, will buy buy or sell securities for
Satrix MAPPS GROWTH ETF Satrix Global Balanced Fund Changes and
of Funds ETF impact
and sell securities solely for the purpose of making a
the purpose of ensuring that profit nor for any purpose
the Portfolio tracks the Index. other than tracking the
As such the investment Index.
objective and style of the 3.5 Investors can obtain
Portfolio will be full participatory interests in
replication of the Index. the Portfolio on the
Accordingly the financial or secondary market or by
other condition of any company subscribing for new
or entity included from time to participatory interest in the
time in the Index will not portfolio on the primary
result in the elimination of market. In order to achieve
its securities from the this objective the Manager
Portfolio, unless the may, subject to the Act and
securities of such company or the Deed, create and issue an
entity are removed from the unlimited number of
Index itself. participatory interests in
the Portfolio.
4.5 The composition of the 3.6 The Portfolio will not be
Portfolio will be adjusted managed according to
quarterly to conform with traditional methods of active
changes in the composition in management, which involve the
the Index. buying and selling of
4.6 The Portfolio shall hold securities based on the
securities purely for the economic, financial and
economic rights and benefits market analysis and investing
attaching thereto and, judgement. Instead, the
accordingly, if there is any investment objective and
takeover bid or other corporate style will be to best
action that occurs in relation represent the tracking of the
to any constituent company or Index and its components
entity the securities of which through investing in the
are included in the Portfolio, underlying exchange traded
the Portfolio shall not funds. As a result, the
surrender any securities held exchange traded funds
by the Portfolio which may be included from time to time
subject to such takeover bid or will be scrutinised to ensure
other corporate action, unless it best represent the Index
such surrender is mandatory components, and where
(and then only to the extent of necessary, may be replaced
such mandatory surrender) in with more appropriate
terms of any applicable law or exchange traded funds.
under the rules of a regulatory 3.7 The composition of the
authority or body having Portfolio will be adjusted
jurisdiction over the Portfolio periodically to conform to
and/or the applicable changes in the composition of
securities. However, if any the Index and the weighting
such takeover bid or corporate of the components of the
action results in company or Index so as to ensure that
entity previously included in the composition and weighting
the Index no longer qualifying of the Portfolio's
for inclusion in the Index, any investments reflect the
securities in such constituent
Satrix MAPPS GROWTH ETF Satrix Global Balanced Fund Changes and
of Funds ETF impact
company or entity held by the composition and weightings of
Portfolio, shall be disposed of the components of the Index.
by the Portfolio and the 3.8 The Portfolio's ability
proceeds derived from such to track the Index will be
disposal shall be applied in affected by, amongst others,
effecting the appropriate the costs and expenses
adjustments to the Portfolio so incurred by the Portfolio and
as to ensure same tracks the the exposure to liquid
Index. assets.
4.7 No assets in liquid 3.9 The Trustee shall ensure
form will make part of the that the investment policy
Portfolio other than proportion set out in the preceding
as provided for in the Index. clauses is adhered to.
4.8 The Portfolio's ability
to replicate the price and
yield performance of the Index
shall be affected by the costs
and expenses incurred by the
Portfolio.
Portfolio Benchmark Portfolio Benchmark Change due to
MAPPS Growth Index Satrix Global Balanced Index amalgamation
Distribution Methodology Distribution Methodology Change due to
Reinvesting quarterly Distributing quarterly amalgamation
Total Expense Ratio Total Expense Ratio Change due to
40 bps 35 bps amalgamation
Impact of Change – Additional Information
Satrix MAPPS Growth Satrix Global Balanced FoF
Description
ETF (Source portfolio) ETF (Target portfolio)
JSE Code STXMAG STXGLB
South African – Multi Asset Global – Multi Asset – High
ASISA Classification
– High Equity Equity
Risk Profile Moderate - Aggressive Moderate - Aggressive
Currency Risk No Yes
Geographical,
Limited to the South Diversified outside of the
Political & Economic
African market only South African market
Risk
Global Developed Equity -
45%
Global Emerging Equity -
SA Equity - 75%
10%
SA Government Bonds - 10%
Strategic Asset Global Listed
SA Inflation-Linked Bonds -
allocation Infrastructure - 10%
10%
Global Real Estate - 5%
SA Cash - 5%
Global Bonds - 15%
Global Inflation-Linked
Bonds - 5%
Global Credit - 5%
Global Cash - 5%
MSCI World
MSCI Emerging Markets
FTSE Global Core
FTSE/JSE SWIX 40 Infrastructure
FTSE/JSE All SA Government FTSE EPRA/NAREIT Developed
Benchmark Indices Bonds Bloomberg Global Aggregate
tracked Bloomberg SA Inflation- Bloomberg US Government
linked Bonds Inflation-Linked Bond
Local Cash Markit iBoxx USD Liquid
Investment Grade 0-5
Secured Overnight Financing
Rate (SOFR)
Predominantly investing in
participatory interests or
any other form of
Direct exposure to local
participation in offshore
equites, bonds & ILBs that
Portfolio Holdings listed exchange traded
track the underlying
funds which each
indices
individually track a
component of the Satrix
Global Balanced Index
Fund Denomination ZAR ZAR
Index Calculation
RisCura RisCura
Agent
Index Rebalancing to
Quarterly Semi-annually
SAA
3rd Friday in March, June, 3rd Friday in March and
Rebalancing dates
September and December September
Total Return /
Gross return Net Total Return
Payout
How the Amalgamation Impacts Your Investment
Replacement participatory interests
When the source portfolio, Satrix Multi Asset Passive Portfolio
Solutions Growth ETF is absorbed into and amalgamated with the
targeted portfolio, the Satrix Global Balanced Fund of Funds ETF,
investors will be issued with replacement participatory interests
(shares) in the new amalgamated fund. The replacement shares will be
equal in market/monetary value to the shares held prior to the
amalgamation, although the number of shares held may change. The
Satrix Multi Asset Passive Portfolio Solutions Growth ETF (source
portfolio) will cease to exist.
This is in accordance with Section 99 (3) (a) of the Act, which
stipulates that on the effective date, every investor:
"…shall… hold in the new scheme or portfolio such participatory
interests with an aggregate money value which is not less than the
lower of the net asset value or market value, as may be fair and
reasonable in the circumstances, of the participatory interests
which such investor, immediately before the date on which the
proposed transaction becomes effective, held in an original scheme
or portfolio;"
Details of the distribution and amalgamation salient dates will be
announced after Financial Sector Conduct Authority ("FSCA")("the
Authority") approval.
Transaction Costs
The change would result in once-off trading costs being incurred
within the source portfolio when the portfolio is liquidated to align
with the targeted portfolio. Investors will benefit from a reduced
TER thereafter.
Taxation implications
Satrix does not provide tax advice, but there should be no tax impact
for investors who remain in the fund.
Special distribution
The FSCA requires that all accrued income in funds to be transferred
be distributed prior to the transfer taking place. In line with this
requirement, both the source and targeted portfolios will declare a
special income distribution.
Effective Date of Change
The effective date of the proposed amalgamation of the funds will be
01 July 2025, provided that the necessary consent is obtained from
investors and the FSCA.
Approval and commencements
Subject to the ballot voting procedure being successful and approval
by the FSCA, the proposed amalgamation will be with effect from
commencement of business on Tuesday,01 July 2025 any changes to the
effective date will be released on SENS effectively.
Expected timeline for the implementation of the proposed
amalgamation:
Weekday Action
Monday, 31 March
2025 Approval from FSCA
Request STRATE register holdings (Cut-off
Monday, 14 April date for investors on record to be balloted
2025 as at 11 April 2025)
Thursday, 17 April
2025 Release of SENS announcement
Deadline for returned ballots (30 business
Monday, 02 June 2025 days after SENS announcement)
Thursday, 05 June
2025 Submission of auditors report to FSCA
Tuesday, 17 June
2025 FSCA approve Supplemental Deed
SENS announcement confirming the results of the
Tuesday, 17 June 2025 ballot and declaration announcement
Action Required
1. Please read this circular on the proposed amalgamation, your rights
as an investor and the impact this will have on your investment.
2. Please complete the enclosed ballot form and email it directly to
our external auditors, KPMG, at satrixballotSTXMAG@kpmg.co.za on
or before 02 June 2025. If you do not participate in the ballot in
time, you will be deemed to have voted in favour of the
amalgamation.
3. Please do not include any other instructions regarding your
holdings with your ballot form, e.g., requests for purchases,
switching instructions, etc. Your ballot form will go directly to
our auditors and, should such instructions be sent to the auditors,
we cannot guarantee that any instruction subsequent to the
commencement of the ballot process will be effected.
4. If you are no longer invested in the Satrix MAPPS Growth ETF, no
action is required.
Your Rights As An Investor
The rights of investors are firmly entrenched in the Act. In terms
of Section 99 of CISCA, as read with Clause 59 of the Deed of the
Satrix Collective Investment Scheme in Securities 2, the Authority
requires that:
• All investors in the affected source portfolios will be informed
in writing on the details of the proposed amalgamation of the
portfolios.
• All source portfolio investors are given an opportunity to vote
in favour of, or against, the proposed amalgamation.
• An independent auditor will verify the outcome of the ballot.
• All investors will be notified in writing of any proposed
material changes to the collective investment schemes and
portfolios in which they hold units, and
• All investors will be given the opportunity to vote on the
proposed changes.
If investors do not respond before the cut-off date, they will be
deemed to have voted in favour of the change.
If the ballot is successful and you do not want your investment to be
included in the amalgamation, you may elect to sell your securities
at any time before the amalgamation effective date and withdraw your
funds at the prevailing market price of the Satrix MAPPS Growth ETF.
Please note that such sale transaction may trigger a CGT event and
that you may be liable for CGT at your next income tax assessment,
and such transaction may also attract brokerage cost.
If you choose not to sell your funds prior to the effective date of
the amalgamation, the amalgamation proposals, as set out in this
letter (if approved by investors), will automatically apply to your
investment.
Should you require further information on the proposed change you
can also email us on info@satrix.co.za.
JSE Sponsor
Vunani Sponsors
17 April 2025
Date: 17-04-2025 09:51:00
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