Intellidex 2020 reviews: Ashburton Top 40 ETF

Catch this insight by Intellidex on the South African equity market. This note is on the Ashburton Top 40 ETF. There are a few ETFs covering the JSE Top 40, so take note of this one when comparing between them. This ETF should be considered for high risk-tolerant investors.

Intellidex insight:The Ashburton Top 40 Index ETF is an index-based fund that buys securities included in the FTSE/JSE top  40 Index in the same proportion that they are included in the index. This index gives broad market exposure to SA’s biggest companies operating in a wide range of sectors, which inherently ensures investors have a well-diversified and stable portfolio. The index is a natural rand-hedge, generating more than 60% of its earnings outside South Africa. However, the approach  implies that the biggest companies exert more influence on the index’s performance, which somewhat diminishes diversification benefits that ETFs are renowned for.

There are four JSE-listed ETFs that mimic the FTSE/JSE Top 40 index. They are identical in most respects, meaning they compete  primarily on costs. The Ashburton Top 40 fund boasts the second-lowest total expense ratio (TER) among the four. Gaining market exposure through this fund is therefore cost-efficient, plus the fund is eligible in the tax-free wrapper. It rebalances only four times a year which ensures low turnover and minimal trading costs.

Fund description:The Ashburton Top 40 ETF tracks the FTSE/JSE Top 40 Index through investing in the physical index’s securities. The index consists of the largest 40 companies, listed on the JSE, ranked by investable market capitalisation.

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Ashburton Top 40 ETF


Top holdings:The top 10 companies constitute 64.3% of the fund. The overbearing combined weight of Naspers and Prosus reduces diversification benefits.

Ashburton Top 40 Top 10 2020

Suitability:This ETF is ideal for passive investors with an appetite for risk and seeking exposure to a portfolio of JSE-listed companies with broad market exposure. Equities are inherently riskier than other asset classes, especially in short periods. However, over longer periods have performed better than inflation and other  investment asset classes such as bonds and cash.

Historical performance:

Ashburton Top 40 Historical performace 2020

Source: and January 2020 fact sheet

Fundamentals:Equities are driven by both local and international macroeconomic activity. The recent global outbreak of Covid-19 will incapacitate both the local and global economy. Even without that exogenous shock, the South African economy has been in a downward spiral for the past few years. At Intellidex, we expect the economy to contract by 2.3% this year, a first annual contraction since the 2008 financial crisis. Similarly, the global economy is forecast to record its worst performance since the global financial crisis.

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Ashburton Top 40 ETF


Fund statistics:

Ashburton Top 40 Fund statistics 2020

Source: iress and January 2020 fact sheets

Alternatives: The fund has a relatively competitive TER of 0.14%. Three of its competitors are 1nvest Top 40 (TER 0.29%), Sygnia (TER 0.15%) and Satrix with the lowest TER of 0.10% among the three

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Ashburton Top 40 ETF Fact Sheet

Ashburton Top 40 Factsheet 2020

For more information around ETFs make sure to check out our new ETF site EasyETFs

Background: Exchange-traded funds (ETFs)

Exchange-traded funds (ETFs) are passively managed investment funds that track the performance of a basket of pre-determined assets. They are traded the same way as shares and the main difference is that whereas one share gives exposure to one company, an ETF gives exposure to numerous companies in a single transaction. ETFs can be traded through your broker in the same way as shares, say, on the Easy Equities platform. In addition, they qualify for the tax-free savings account, where both capital and income gains accumulate tax free.

Benefits of ETFs

  • Gain instant exposure to various underlying shares or bonds in one transaction
  • They diversify risk because a single ETF holds various shares
  • They are cost-effective
  • They are liquid – it is usually easy to find a buyer or seller and they trade just like shares
  • High transparency through daily published index constituents


This research report was issued by Intellidex (Pty) Ltd. Intellidex aims to deliver impartial and objective assessments of securities, companies or other subjects. This document is issued for information purposes only and is not an offer to purchase or sell investments or related financial instruments. Individuals should undertake their own analysis and/or seek professional advice based on their specific needs before purchasing or selling investments. The information contained in this report is based on sources that Intellidex believes to be reliable, but Intellidex makes no representations or warranties regarding the completeness, accuracy or reliability of any information, facts, estimates, forecasts or opinions contained in this document. The information, opinions, estimates, assumptions, target prices and forecasts could change at any time without prior notice. Intellidex is under no obligation to inform any recipient of this document of any such changes. Intellidex, its directors, officers, staff, agents or associates shall have no liability for any loss or damage of any nature arising from the use of this document. 


The opinions or recommendations contained in this report represent the true views of the analyst(s) responsible for preparing the report. The analyst’s remuneration is not affected by the opinions or recommendations contained in this report, although his/her remuneration may be affected by the overall quality of their research, feedback from clients and the financial performance of Intellidex (Pty) Ltd.

Intellidex staff may hold positions in financial instruments or derivatives thereof which are discussed in this document. Trades by staff are subject to Intellidex’s code of conduct which can be obtained by emailing mail@intellidex.coza.

Intellidex may also have, or be seeking to have, a consulting or other professional relationship with the companies mentioned in this report

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