You're listening to Strictly Business Podcast with Lindsay Williams.
With me is Siobhan Simpson, Head of SA Unit Trusts at 91,
on the day that 91 has listed two actively managed exchange-traded funds on the JSC.
First of all, Siobhan, congratulations.
And before we get to the details of the funds themselves, why now after 35 years?
Thanks, Lindsay, and good to be here this morning.
You know our business really, really well.
So I...
I'm sure you can actually appreciate that this listing now brings those 35 years of
active experience that you talk about
into a listed accessible format.
Our goal is always to help clients stay diversified, liquid, invested, and even in
difficult times.
So we really are agnostic about what wrapper the client wants to use to really
gain access to our expertise.
For us, It's another way 91 is evolving to suit investor needs.
And this time, just bringing our active edge to the listed market.
It really is, there's much more exciting things to come as well.
This is just the start.
We're not only launching in South Africa.
The launch is part of our global plan.
We're starting here in South Africa, where obviously 91's roots run really deep.
So that made perfect sense for us.
But these listings mark the first of the beginning of a broader international
rollout with launches in the US.
Frankfurt and London to follow soon and then locally also some more for us next
year.
Okay I'll put that down in my diary because that means I'm going to be
speaking to you much more often in the future Siobhan.
Now you kindly sent me a press release and I saw the phrase evolving client needs.
Is this listing or are these listings as a result of clients saying this is what we
want because of what is happening globally for
example?
So in part yes Lindsay and it's really to broaden our reach.
So I think...
You know, ETFs have been around for a long period of time.
A lot of people recognize them really in the passive space.
And actively managed ETFs are really an evolution from that.
They're dynamic.
They're actively managed ones.
Our investment teams are obviously trying to outperform an index based on their
research.
So, really, it's about having an active option now in the ETF space.
There's been an increase in the number of alternatives that you can buy, the number
of actively managed ETFs.
And then really it's the investors.
It's attractive for a different set of investors.
The ease of access, low minimums make ETFs appealing for a new generation.
And I think sometimes we think it's about age and a younger generation.
And it's not only about that.
We've all become used to real-time experiences, whether we're shopping,
banking, managing our lives on an app.
And actively managed ETFs bring that accessibility to investing,
allowing clients to see and manage their investments in a way that feels familiar
and in step with the times, really.
What's happening globally, talking about being in step with the times?
Let's look at the global picture when it comes to actively managed ETFs.
Because when I think of an ETF, and I think a lot of other people are the same,
they think of a passive investment.
You put your money in, you take your money out, and that's the end of it.
Clearly not the case with the actively managed offering.
Yes.
So like you say, ETFs, I think, have that traditional passive mindset.
But the ETF industry globally is $18 trillion,
and it's obviously expected to reach about $25 trillion in the next three to four
years.
And active ETFs are actually the fastest growing segment of that ETF market.
More than half the launches last year were active strategies globally.
And like you say, it combines the benefits of the transparency, the efficiency of the
wrapper together with...
actually being able to outperform an index.
In South Africa, passive ETFs have been around for years,
but active ETFs were only allowed in 2022.
And active ETFs in South Africa are only 6% of the overall ETF market.
So a lot of room for growth in the space.
Right, let's get to the products themselves now.
Tell us about the two ETFs that you've launched.
So we're starting with two income ETFs, one local, one global.
The first is 91 Diversified Income.
And it's a RAN-based Reg 28 compliant portfolio and focused on generating
reliable income living capital.
It's a multi-asset income solution diversified across South Africa and a
little bit of offshore,
a yield of nearly 9% at the moment.
So a nice tick up above cash.
And then on the global side, it's 91 global diversified income.
It's a RAN feeder into the global US dollar income fund.
And really for clients wanting to get offshore, taking money.
offshore into a fee to dollar, but not wanting to go into the markets yet.
So a yield of just below 5% and for investors who want diversified global
exposure, but not into the market.
When you said global diversified income, I immediately thought of interviews that
I've done regularly with the fund manager
for the Global Diversified Income Fund.
Now, the question here is that why suddenly actively manage ETFs?
How do they complement the existing suite of products that you have.
Lindsay, both of these products are available in a Unitrust format.
So this is just a different wrapper.
It's the manufacturing, the underlying manufacturing is the same.
It's just the wrapper that some clients will choose to access the expertise in is
different.
That's really what this is, allowing a different set of investors to access our
expertise.
Are you expecting a different set of investors to take up this offering quite
enthusiastically?
Is that what you hope, obviously?
Oh, we definitely hope that.
We believe in the underlying manufacturing capabilities within our business, globally
integrated teams.
And I think that's why we want to get this active expertise to as many people as
possible and give them access.
Siobhan, thank you very much for your time.
Siobhan Simpson is head of SA Unit Trusts at 91.
Exchange-traded funds are listed on an exchange and may incur additional costs.
Past performance is not a reliable indicator of future results.
The value of investments can fall as well as rise.
The portfolio as mentioned operates as white label funds under the Prescient ETF
scheme,
which is governed by the Collective Investment Scheme Control Act.
The management company Prescient and trustee are registered and approved under
the Collective Investment Schemes Control Act
No. 45 of 2002.
Prescient and 91 are members of the Association for Savings and Investments
South Africa.
The views and opinions expressed in these podcasts are those of Lindsay Williams and
various contributors and do not reflect the policy,
position or opinion of any other agency, organisation,
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Assumptions made on the analyses are not reflective of the position of any other
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And since we are critically thinking human beings, these views are always subject to
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revision and rethinking at any time.
Please do not hold us to them in perpetuity.