Investing in Ashburton Global 1200 Equity ETF
The Ashburton Global 1200 Equity ETF, which tracks the S&P Global 1200 Index, was launched only two and half years ago and has already proved a big hit with South African investors looking for a truly globally diversified, hard currency investment in exchange traded funds.
The assets under management of Ashburton Global 1200 Equity ETF recently topped R600 million and as investor interest remains strong in its holding of the world’s best companies.
It provided a total return of 24.10% in 2019, that is in large part to its 60% exposure to the S&P 500 with strongly performing shares like Apple, Microsoft, Amazon, Facebook and Warren Buffet’s Berkshire Hathaway.
Since its launch in October 2017, its total return is 9.30%, far outperforming the Johannesburg Stock Exchange’s Top40 and All Shares indices over this period.
The ETF holds 70% of the world market cap, covering seven distinct regions and 30 countries. These include the S&P500 (United States), S&P Europe 350, S&P TOPIX 150 (Japan), S&P/TSX 60 (Canada), S&P/ASX All Australian 50, S&P Asia 50 and S&P Latin America 40.
Each stock in the index must meet liquidity standards and each component region has appropriate sector representation. The size of each region corresponds to its relative size in the global equity market, based on a float-adjusted market value.
The ETF allows for South African investors to invest and diversify into developed market stocks, and a small portion of emerging market stocks, without having to apply for offshore allowances, one of the greatest advantages of ETF investing.
It therefore provides geographic and currency diversification and is excellent hedge against rand weakness.
The ETF also has a low correlation with JSE shares, which means it doesn’t move completely in sync with local shares. This reduces overall portfolio risk for South African investors.
It is traded like other shares in the JSE. It’s Total Expense Ratio (TER) is 0.59%, less than a quarter of the costs of investing in actively managed offshore funds.