The FSCA has approved amendments to the JSE’s Listings Requirements to enable the listing of actively managed exchange-traded funds (ETFs).
The approval was published in the Government Gazette on 9 September, and the amendments take effect on 14 October.
Investors are familiar with passive ETFs whose underlying portfolios are rebalanced regularly to reflect changes in the index tracked by a fund. In the case of actively managed ETFs, the fund managers select shares and make regular trades to generate returns.
In April, the JSE announced its intention to amend the Listings Requirements to enable the listing of actively managed ETFs.
Valdene Reddy, director of capital markets at the JSE, said the change would enable institutional and retail investors to develop beneficial investment strategies.
“There is rising appetite locally for listed actively managed ETFs. It is in line with international trends where demand for active ETFs is growing,” she said.
Reddy said the amendment was expected to increase the number of ETF listings on the JSE.
“Most importantly, passive and active ETFs offer investors an opportunity to diversify their portfolios cost-effectively.”
The first actively managed ETF in the US market was listed in 2008, and to date, more than 1 000 actively managed products have been listed around the world.
