1 / 16

The GOVI Exchange Traded Fund www.govex.co.za

The GOVI Exchange Traded Fund www.govex.co.za . What is the Govex?. The Govex is an Exchange Traded Fund that tracks the BESA GOVI through following the same rules and holding bonds in the same proportion as represented in the GOVI. Objectives.

chinue
Télécharger la présentation

The GOVI Exchange Traded Fund www.govex.co.za

An Image/Link below is provided (as is) to download presentation Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author. Content is provided to you AS IS for your information and personal use only. Download presentation by click this link. While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server. During download, if you can't get a presentation, the file might be deleted by the publisher.

E N D

Presentation Transcript

  1. The GOVI Exchange Traded Fundwww.govex.co.za

  2. What is the Govex? The Govex is an Exchange Traded Fund that tracks the BESA GOVI through following the same rules and holding bonds in the same proportion as represented in the GOVI

  3. Objectives • To provide a real and investable version of the GOVI • Representative and comprehensive depiction of the performance of South African Government Bonds • Ease of trading allowing purchase and sale of an entire basket in one transaction • Ease of management through providing investors a self-balancing low cost vehicle that automatically reinvests coupons

  4. Govex Units • Debentures trading on BESA • Price listed • Starting price set at R100 000 per debenture • Each debenture represents a basket of bonds held in a common portfolio that uses the GOVI’s methodology • This basket is rebalanced quarterly • Coupons are notionally paid out and immediately reinvested

  5. BESA Member Debentures Cash Bonds Bond Market Authorized Participant Trading Instructions Cash Bonds Debentures Exchange Traded Funds Limited Asset Manager Clade Administrator Prescient Custodian Societe Generale Bond Bond Bond Bond Bond Bond Bond Bond Bond Govex Structure

  6. Govex Functions - One • To provide a simple, transparent and low cost method to track the GOVI • Government bonds are a significant component of even the most active managers portfolio • Significant time and expense is wasted on rebalancing these government bond portfolios • By investing in the GOVEX fund managers free up time for more value added activities • Costs of investing in and holding the GOVEX are as low, or lower, than costs that would be incurred through maintaining a portfolio of underlying bonds

  7. Govex Functions - Two • To provide perfect liquidity through: • allowing investors to immediately convert into the underlying portfolio of bonds • Govex debentures can be created in kind (in units of 500 debentures) at any time during trading hours through providing the appropriate mix of bonds • Govex debentures can be redeemed in kind (in units of 500 debentures) at any time during trading hours for the underlying mix of bonds • Daily holdings per debenture are published on the Govex Website, and Clade will provide live holdings at any time during trading hours per request • Clade does not charge for this creation and redemption, but there are exchange and settlement fees • Allowing investors to create and redeem debentures for cash at any time during trading hours • Govex debentures can be created or redeemed for cash in any quantity at any time during trading hours • PSG Absolute Investments will create and redeem debentures at a cost of 4 bps on index value

  8. Data • Prices quoted on BESA during trading hours • Composition of the closing portfolio published daily on website, and available live on request during trading hours • Closing Net Asset Value and Price published daily on website and available live on request during trading hours

  9. Liquidity • Authorized Participants create and redeem units live at NAV • Quote based on best available bid/offer prices for underlying bonds • Fee of 4 bps on value (aprox 0.8 bps on yield) • Units are creatable and redeemable in kind (i.e. for the basket of underlying bonds) • Minimum of 500 debentures • No costs except for normal transactional costs • Brokerage, settlement and exchange

  10. How to Acquire Govex Units – Secondary Market • Govex units can be acquired in the same way as any other debenture listed on BESA

  11. How to Acquire Govex Units – Primary Market • In Kind (minimum of 500 units) • Request live composition of Govex from Clade • Deliver basket of bonds equivalent to Govex to Govex Securities Account • XTF will provide debentures equal to the Net Asset Value of the basket as of time of receipt of basket • In Cash (minimum of 500 units) • Deliver cash to Govex Cash Account • Authorized Participant will acquire underlying basket of bonds at a fee of 4bps on value • XTF will provide debentures equal to the cash paid less AP fee divided by Net Asset Value as of close of day price

  12. How to Sell Govex Units – Secondary Market • Govex units can be sold in the same way as any other debentures listed on BESA

  13. How to Redeem Govex Units – Primary Market • In Kind (minimum of 500 units) • Request live composition and NAV of Govex from Clade • Deliver Govex Debentures to Govex Securities Account • XTF will deliver bonds as per the live composition after transaction costs at the time of receipt of instruction • In Cash (minimum of 500 units) • Deliver debentures to Govex Securities Account • Authorized Participant will sell underlying basket of bonds at a fee of 4bps on value • XTF will deliver net cash proceeds from sale of bonds

  14. PRO FORMA RETURNS OF GOVEX Source: Clade July 2006

  15. Total Expense Ratio Note: All above bps on price.1 bp on price = aprox. 0.2 bps on yield

  16. The GOVI Exchange Traded Fundwww.govex.co.za

More Related