Namibia Government Bond ETF

This ETF marks a first for Namibia, but actually, a first for the region and perhaps the continent too.

A first for Namibia, and the only ETF holding only Namibian Assets, the NewFunds S&P Namibia Bond ETF gives you exposure to Namibia Dollar denominated Government debt via the JSE or NSX, in a non-paper settled form.

It is a first for the region because of the price – the 10 basis point total expense ratio means it is the lowest cost ETF in the region, and we believe on the continent.

The ETF is a collaboration between Cirrus Capital (Pty) Ltd and NewFunds (RF) (Pty) Ltd. The ETF is dual listed on the Namibia and Johannesburg Stock Exchanges, thus allowing Namibian and foreign investors to purchase Namibian Government debt in a cost-effective, digitally settled, manner. This listing is part of the country’s on-going efforts to deepen and develop local capital markets and attract investment into Namibia. We believe the ETF is an important and valuable initiative for the country, as it helps to bring foreign money into the Namibian bond market space.

It thus contributes to a diversified set of funding options for the Namibian Government, especially in local currency terms. By bringing foreign fund flows into the Namibian economy, this ETF helps to support the country’s foreign exchange reserves, as well as inject much needed liquidity into our economy and help to support growth.

Portfolio objectives

The ETF, while primary listed on the JSE, holds all Namibian underlying bonds. Because of this, it is considered a local asset under Regulation 13, making it a positive option for the ever-more prevalent passive core, active satellite investment model that has taken over much of the world. The market makers, Absa Capital Securities (Pty) Ltd and Cirrus Securities (Pty) Ltd, guarantees a degree of liquidity on the fund, thus allying some investor fears as to ability to buy and sell the product.

The Portfolio has been established with the intention of allowing an Investor to obtain market exposure to the Top 10 largest Sovereign Bonds issued by the Government of the Republic of Namibia. The Portfolio will track and replicate the total return version of the S&P Namibia Sovereign Bond 1+ year Top 10 Index in local currency of the Republic of Namibia, an index whereby each constituent bond has a maturity of greater than or equal to 12 months. The index is created and maintained by S&P Dow Jones Indices, and is a subset of the full Namibia Sovereign Bond Index. The Portfolio will replicate the performance of the index in local currency, rebalance monthly in line with the Index, and reinvest all income received by the Portfolio into the constituents securities of the index thereby increasing the net asset value of the Portfolio. The Portfolio is listed on both the Namibian Stock Exchange (NSX) and Johannesburg Stock Exchange (JSE) as an Exchange Traded Fund (ETF), and can be traded throughout any trading day at prevailing market prices.