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You're listening to Strictly Business
Podcast with Lindsay Williams.

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With me is Siobhan Simpson, Head of SA
Unit Trusts at 91,

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on the day that 91 has listed two actively
managed exchange-traded funds on the JSC.

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First of all, Siobhan, congratulations.

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And before we get to the details of the
funds themselves, why now after 35 years?

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Thanks, Lindsay, and good to be here this
morning.

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You know our business really, really well.

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So I...

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I'm sure you can actually appreciate that
this listing now brings those 35 years of

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active experience that you talk about

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into a listed accessible format.

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Our goal is always to help clients stay
diversified, liquid, invested, and even in

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difficult times.

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So we really are agnostic about what
wrapper the client wants to use to really

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gain access to our expertise.

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For us, It's another way 91 is evolving to
suit investor needs.

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And this time, just bringing our active
edge to the listed market.

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It really is, there's much more exciting
things to come as well.

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This is just the start.

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We're not only launching in South Africa.

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The launch is part of our global plan.

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We're starting here in South Africa, where
obviously 91's roots run really deep.

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So that made perfect sense for us.

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But these listings mark the first of the
beginning of a broader international

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rollout with launches in the US.

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Frankfurt and London to follow soon and
then locally also some more for us next

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year.

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Okay I'll put that down in my diary
because that means I'm going to be

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speaking to you much more often in the
future Siobhan.

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Now you kindly sent me a press release and
I saw the phrase evolving client needs.

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Is this listing or are these listings as a
result of clients saying this is what we

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want because of what is happening globally
for

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example?

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So in part yes Lindsay and it's really to
broaden our reach.

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So I think...

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You know, ETFs have been around for a long
period of time.

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A lot of people recognize them really in
the passive space.

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And actively managed ETFs are really an
evolution from that.

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They're dynamic.

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They're actively managed ones.

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Our investment teams are obviously trying
to outperform an index based on their

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research.

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So, really, it's about having an active
option now in the ETF space.

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There's been an increase in the number of
alternatives that you can buy, the number

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of actively managed ETFs.

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And then really it's the investors.

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It's attractive for a different set of
investors.

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The ease of access, low minimums make ETFs
appealing for a new generation.

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And I think sometimes we think it's about
age and a younger generation.

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And it's not only about that.

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We've all become used to real-time
experiences, whether we're shopping,

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banking, managing our lives on an app.

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And actively managed ETFs bring that
accessibility to investing,

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allowing clients to see and manage their
investments in a way that feels familiar

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and in step with the times, really.

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What's happening globally, talking about
being in step with the times?

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Let's look at the global picture when it
comes to actively managed ETFs.

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Because when I think of an ETF, and I
think a lot of other people are the same,

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they think of a passive investment.

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You put your money in, you take your money
out, and that's the end of it.

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Clearly not the case with the actively
managed offering.

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Yes.

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So like you say, ETFs, I think, have that
traditional passive mindset.

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But the ETF industry globally is $18
trillion,

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and it's obviously expected to reach about
$25 trillion in the next three to four

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years.

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And active ETFs are actually the fastest
growing segment of that ETF market.

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More than half the launches last year were
active strategies globally.

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And like you say, it combines the benefits
of the transparency, the efficiency of the

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wrapper together with...

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actually being able to outperform an
index.

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In South Africa, passive ETFs have been
around for years,

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but active ETFs were only allowed in 2022.

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And active ETFs in South Africa are only
6% of the overall ETF market.

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So a lot of room for growth in the space.

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Right, let's get to the products
themselves now.

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Tell us about the two ETFs that you've
launched.

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So we're starting with two income ETFs,
one local, one global.

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The first is 91 Diversified Income.

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And it's a RAN-based Reg 28 compliant
portfolio and focused on generating

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reliable income living capital.

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It's a multi-asset income solution
diversified across South Africa and a

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little bit of offshore,

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a yield of nearly 9% at the moment.

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So a nice tick up above cash.

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And then on the global side, it's 91
global diversified income.

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It's a RAN feeder into the global US
dollar income fund.

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And really for clients wanting to get
offshore, taking money.

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offshore into a fee to dollar, but not
wanting to go into the markets yet.

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So a yield of just below 5% and for
investors who want diversified global

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exposure, but not into the market.

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When you said global diversified income, I
immediately thought of interviews that

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I've done regularly with the fund manager

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for the Global Diversified Income Fund.

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Now, the question here is that why
suddenly actively manage ETFs?

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How do they complement the existing suite
of products that you have.

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Lindsay, both of these products are
available in a Unitrust format.

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So this is just a different wrapper.

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It's the manufacturing, the underlying
manufacturing is the same.

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It's just the wrapper that some clients
will choose to access the expertise in is

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different.

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That's really what this is, allowing a
different set of investors to access our

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expertise.

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Are you expecting a different set of
investors to take up this offering quite

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enthusiastically?

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Is that what you hope, obviously?

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Oh, we definitely hope that.

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We believe in the underlying manufacturing
capabilities within our business, globally

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integrated teams.

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And I think that's why we want to get this
active expertise to as many people as

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possible and give them access.

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Siobhan, thank you very much for your
time.

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Siobhan Simpson is head of SA Unit Trusts
at 91.

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Exchange-traded funds are listed on an
exchange and may incur additional costs.

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Past performance is not a reliable
indicator of future results.

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The value of investments can fall as well
as rise.

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The portfolio as mentioned operates as
white label funds under the Prescient ETF

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scheme,

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which is governed by the Collective
Investment Scheme Control Act.

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The management company Prescient and
trustee are registered and approved under

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the Collective Investment Schemes Control
Act

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No. 45 of 2002.

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Prescient and 91 are members of the
Association for Savings and Investments

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South Africa.

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The views and opinions expressed in these
podcasts are those of Lindsay Williams and

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various contributors and do not reflect
the policy,

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position or opinion of any other agency,
organisation,

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employer or company associated with
StrictlyBusinessPodcast.com.

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Assumptions made on the analyses are not
reflective of the position of any other

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entity other than the speaker or the
author.

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And since we are critically thinking human
beings, these views are always subject to

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change,

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revision and rethinking at any time.

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Please do not hold us to them in
perpetuity.
