We love ETFs here at EasyEquities, and we are very pleased to welcome a new member to the ETF family, the Global Dividend Aristocrats ETF (Exchange Traded Fund). A lot of you have asked about dividends and how you can invest in companies that pay them out so you can grow your wealth even quicker; so if that’s you or if you're just an #ETFNerd like I am, you might like this ETF too!
This ETF is available on our platform as an IPO (Initial public offering - if you're not sure what that is, scroll down for our #easy explanation) and will list on the Johannesburg Stock Exhange on the 22 February 2018. It's also going to be available in your TFSA account - a bonus seeing that we're nearing the end of the tax year so you might be looking to top yours up before 28 Feb. The ETF cost, known as TER (Total expense Ratio), will be an expected 0.60% with management fees of 0.35%
Check out what our friends at CoreShares have to say about this new ETF.
"In 1970, the Boston Consulting Group introduced the concept of a ‘Cash Cow’ as part of its ‘growth share matrix’. A cash cow is a metaphor for a dairy cow that reliably produces milk over its life and requires little upkeep. After the initial capital outlay, the cow continues to produce milk for many years to come. In keeping with this convention, CoreShares is proud to announce an ETF that seeks to help investors gain access to such cash generators in the global equity universe.
CoreShares, no stranger to Dividend Aristocrats, has been running the local strategy for over three years. Investors who select the ETF typically do so based on the merits of the strategy which tends to include companies that are cash generative with robust earnings, balance sheet strength and disciplined management. Our inspiration for launching the local CoreShares Dividend Aristocrats ETF was based on our admiration of the broader global S&P Dividend Aristocrats® franchise.
The strategy has been successful as it is based on a simple, intuitive and timeless investment strategy of selecting companies with a strong track record of growing dividends. This strategy has delivered above expectations over decades globally. Following from our tendency to introduce innovative products, CoreShares is excited to launch the first Global Dividend Aristocrats ETF to trade in South Africa."
Well there you have it folks.
What is an IPO?
Companies make Initial Public Offerings (IPOs) when they are ready to step into the limelight and sell their shares to the public for the first time. This allows them to raise money before the share becomes officially available on the market, giving a select number of people first dibs on the investment opportunity. Think early bird tickets to a concert you’re dying to go to. Same same but different… there are a few qualifying criteria.
Companies issue IPOs to brokerage firms (that would be us) who then open the opportunity up to their clients (that’s you!). Once we have collected all requests from our users, we send this through to the company making the IPO and if they are able to – they’ll allow us to execute those requests when the market opens. There are quite a few variables they’ll need to consider (the outcome is not a given) and may only be able to offer us a certain overall purchase amount, meaning you won’t get the full investment amount you were hoping for.
Until next time
Waylon Smit
Basket and Bundle guru