JSE lists 2 ESG-focused ETFs on main board to offer investors developed market equity exposure

Charles Abuede

The Johannesburg Stock Exchange (JSE), Africa’s largest stock exchange by market capitalisation, has listed two global environmental, social and governance (ESG) focused exchange traded funds (ETFs), the Satrix MSCI EM ESG Enhanced ETF and the Satrix MSCI World ESG Enhanced ETF respectively, on its mainboard. The listing makes the JSE first South African stock exchange to list global ESG focused ETFs.

Valdene Reddy, director of capital markets at the JSE, said the exchange is excited to list the two global ESG focused ETFs that broadens the investment offerings of the South African local bourse.

“We have always been committed to sustainability – 16 years ago we introduced the first exchange-sponsored sustainability index globally, which was also the first sustainability index in emerging markets. We are also a signatory to the United Nations-backed Principles for Responsible Investment and a founding partner of the Sustainable Stock Exchanges Initiative.

“Today we are excited to list two global ESG focused ETFs that broaden our investment offerings in a world where environmental, social and governance factors play an integral role in investment decision making. Impact investing has become increasingly topical and for us to provide investors with access to sustainable investment options are a key focus,” Valdene said.

Earlier in the year, the JSE had expanded its Green Bond Segment of the market to a fully-fledged Sustainability Segment.  The JSE’s Sustainability Segment will make it accessible and easier for companies to list and trade sustainability-related instruments to raise funds for activities directed at sustainable development.  Meanwhile, the segment provides a platform for companies to raise debt for green, social and sustainable initiatives on a trusted, global market place.

Helena Conradie, Satrix CEO, while commenting on the listing said, “Investors have a growing desire for their portfolios to reflect good environmental, social and governance principles. These new ESG ETFs allow investors to pursue these objectives while offering global equity exposure across developed or emerging markets. We’ve added five new ETFs to our range this year. These ESG funds expand our global offering and bring the total number of Satrix ETFs to 20.”

Accordingly, the director of capital markets at the JSE further revealed that with 78 ETFs now listed on the JSE’s Main Board, the bourse continues to be a pioneer in the investment field by providing innovative and diverse investment options for the benefit of both retail and institutional investors. 

She further disclosed that both ETFs are designed to maximise exposure to positive environmental, social and governance (ESG) metrics. Both ETFs offer investors the chance to evaluate their desire for emerging or developed market equity and combine it with an aspiration to invest responsibly.

Meanwhile, as the JSE gets closer to the 20th anniversary of listed ETFs, the exchanges’ total ETF market cap is R107.7 billion ($6.61 million). ETFs continue to offer attractive and diverse opportunities for investment. The listing of the Satrix MSCI EM ESG Enhanced ETF and the Satrix MSCI World ESG Enhanced ETF makes this the fourth and fifth ETF listings on the JSE in 2020.