Absa Capital (the investment banking division of Absa Bank Limited, and affiliate to Barclays Capital) is a leading provider of ETFs in the South African market and is credited for several innovations and market-firsts in the ETF space – the first ETF based on a customised, equally weighted index (the NewRand ETF), the first, and still the only, commodity backed ETF in SA (the NewGold ETF), the first family of ETFs based on fundamental indexation (eRAFI™ ETFs), as well as the first and only family of multi-asset ETFs in SA (MAPPS™ ETFs).
It strives to offer investors low-cost, convenient and innovative alternatives to traditional investment products. In particular, Absa Capital’s strategic focus is to provide simple, targeted and cost-effective beta (market benchmark indices) and beta-plus (“smart” indices, style and thematic indices, investment strategies) investment building blocks for institutional investors.
To this end, Absa Capital has created a series of five Component ETFs that are now available to investors. The Component ETFs were designed to offer investors cost-effective access to major asset classes – equities, nominal bonds, inflation linked bonds and money market, as well as to investment themes / risk factors (e.g., equity momentum).
New to the ETF industry as the first money market ETF, the TRACI 3 Month ETF tracks the performance of Barclays Capital/Absa Capital ZAR Tradable Cash (TRACI) Index (three month). Most existing money market unit trusts are typically benchmarked against STEFI, a non-investable benchmark. The innovative Barclays Capital/ Absa Capital TRACI indices, in comparison, are fully investable and constructed to track the overnight, 3-month, 6-month and 12-months SA money market deposit rates. The TRACI indices measure the mark-to market value of the income earned from rolling a money market deposit for the relevant maturity on a monthly basis. The indices aim to maintain a constant maturity and track the present value of deposit accounts.