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Absa, Vunani Capital to launch BEE exchange-traded fund

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South African investment bank Absa Capital and Vunani Capital are to launch South Africa’s first black economic empowerment (BEE) exchange traded fund (ETF) this month, creating an investa

South African investment bank Absa Capital and Vunani Capital are to launch South Africa’s first black economic empowerment (BEE) exchange traded fund (ETF) this month, creating an investable BEE financial instrument.

The fund, called NewSA, will be launched on 19 September, according to Absa Capital. "It is aimed at institutional investors, fund and asset managers as well as high net worth individuals wanting to increase their exposure to blue-chip companies listed on the JSE with high black economic empowerment (BEE) ratings," the firml said in a statement.

NewSA, a portfolio in NewFunds Collective Investment Scheme, was aimed at institutional investors, fund and asset managers, as well as high net-worth individuals wanting to increase their exposure to blue-chip companies listed on the JSE with high BEE ratings.

The NewSA ETF will track the performance of the NewSA Index, a modified Top-40 index, with the constituent weightings adjusted to reflect their respective BEE status, as determined using the Codes of Good Practice on broad-based black economic empowerment, published by the Department of Trade and Industry. And according to Absa Capital CEO John Vitalo it will allow market forces to reward transformation by allocating relatively more funds to those companies in the Top 40 with a higher broad-based empowerment rating.

Vladimir Nedeljkovic, head of hybrids at Absa, feels the NewSA will appeal to people who have a positive sentiment towards South Africa. ‘It provides investors a clear means of supporting BEE in South Africa without forgoing investment performance," he says.

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