Sygnia is making the fast-growth world of AI investment available to South African investors at the touch of a button with the launch of the JSE’s first tech and AI-focused actively managed ETF. Iva Madjarova, Sygnia’s Head of Institutional Business, explains why the new fund is a groundbreaker.
Sygnia will become the first asset manager in South Africa to launch a tech and AI-focused Actively Managed Exchange Traded Fund (AMETF) when the new Sygnia Itrix FANG.AI Actively Managed ETF goes live on the JSE on the 29th of September 2023. The move follows the JSE’s October 2022 decision to allow actively managed ETFs, which in turn has enabled Sygnia to make active investment into the high-growth tech and AI space easier and simpler for the average investor.
The objective of the new Sygnia Itrix FANG.AI Actively Managed ETF is to provide a simple vehicle to investors who wish to gain investment exposure to companies that use advanced technologies to acquire and retain users, including industry disrupting technologies such as artificial intelligence, large language models (LLM), cloud storage, big data, social media, and e-commerce tools.
The portfolio is actively managed and its holdings will depend on a number of factors, including its underlying NYSE® FANG+™Index benchmark. Importantly, though, the portfolio is not obliged to hold all the benchmark constituents, enabling our portfolio managers to exclude or include stocks based on current and thematic indicators.
Innovative AI Investment Duo: Unit Trust and AMETF
Ultimately, our investors can now choose to get exposure to these “AI themes” and leading technology companies via either the unit trust fund (Sygnia FAANG Plus Equity Fund) or the AMETF (Sygnia Itrix FANG.AI Actively Managed ETF). Both are actively managed funds that invest in the same stocks and the management cost for both is set at 0.70%; the only difference is the investment vehicle itself. There are two major differences between these two investment vehicles: the one is listed and trades on the JSE and can be tracked real time and the other is not listed, a unit trust priced once a day.
In terms of the first, AMETFs on the JSE enable South Africans to invest in offshore companies at, quite literally, a click of the button. Plus, investors can track performance in real-time, any time of the day.
A New Era of AI Investment
The new Sygnia Itrix FANG.AI Actively Managed ETF is the 16th in Sygnia’s Itrix range on the JSE. Sygnia is known for innovative products, notably the Sygnia Itrix lineup of ETFs that offer exposure to offshore markets. Therefore, introducing this AI-focused fund as our first AMETF aligns perfectly with who we are.
We’ve seen a lot of growth already, particularly in the LLM (Large Language Models) sector and its related industries, such as semi-conductors and innovative cloud storage providers, and I am certain there is far more growth to come. With the new Sygnia Itrix FANG.AI Actively Managed ETF we are making it simpler and easier for South African investors to get instant exposure to high-growth tech and AI stocks, then sit back and reap the benefits while Sygnia’s active portfolio managers to do all the work.