There have been few options so far for the man in the street who wants to put money in a local tracker fund that invests in Africa beyond our borders. That’s about to change on April 20, with the listing on the JSE of an exchange traded fund (ETF) that tracks an index comprising 50 companies across the continent, excluding South Africa.
The AMI Big 50 ex-SA ETF, offered by Cloud Atlas Investing, a young Johannesburg-based boutique manager focusing on African investment markets, will track an index custom-designed by Cloud Atlas to offer a diversified investment across some of the largest companies on 15 African stock exchanges.
The ETF is currently the subject of an initial public offering on the JSE, which requires large investment capital, but once listed, it will be accessible to the retail investor, Mandlakazi Gcasamba, the financial officer at Cloud Atlas, says. It will also be available on the etfSA onlineplatform, according to the company’s managing director, Mike Brown.
The top five exchanges to which the AMI Big 50 has exposure, according to the fund’s minimum disclosure document, are: Morocco, Egypt, Nigeria, Kenya, and BRVM, an exchange in Abidjan that serves a handful of West-African countries. The current top five holdings in the index are: Maroc Telecom (Morocco), Dangote Cement (Nigeria), Attijariwafa Bank (Morocco), Safaricom (Kenya) and Lafarge Ciments (Morocco).
Two more Africa-focused ETFs will be launched by Cloud Atlas in June: the AMI Real Estate ex-SA ETF, which will track an index of African-listed property companies, and the AMI Consumer ex-SA ETF, which will concentrate on the food and beverage, healthcare, retail and telecommunications sectors.
Actively managed equity funds you can look at if you are interested in investing in Africa outside South Africa are the Absa Africa Equity Fund, the Ashburton Africa Equity Opportunities Feeder Fund, Prescient’s Africa Equity and Africa Sustainable funds, the Rudiarius BCI Africa Equity Fund, and the Sygnia Africa Equity Fund.
There are also two equity-specific exchange traded notes (ETNs) available to retail investors: the Deutsche Bank MSCI Africa Top 50 Capped Total Return ETN and the Standard Bank African Equity ETN. ETNs differ from ETFs in that they do not hold the underlying assets.