Top performing PortfolioMetrix income fund set to list ETF version on JSE

Well positioned to excel in a falling interest rate environment


Global investment manager PortfolioMetrix announced on the 24th of January that it will list an actively managed exchange-traded income fund on the JSE at the end of January.

ETFs are pooled investments that operate much like a unit trust but can be bought and sold on a stock exchange the same way equities can. While they offer the diversification benefits of unit trusts, they are traded with the same ease as stocks.  

Philip Bradford, the firm’s Head of Investments for South Africa, said that the fund will predominantly invest in interest-bearing securities and aim to achieve a high level of sustainable income while also prioritising capital preservation. 

“With a current gross yield of 11.8%, we are positioned to do well in a falling interest rate environment, which we expect to be the case over the next few years,” he said.

Named the PortfolioMetrix Active Income Prescient AMETF, it will be listed on the 31st of this month. It is essentially a listed version of the PortfolioMetrix BCI Dynamic Income Fund, the top performing fund across all SA income categories for three years to the end of December 2023.

“The decision to offer the portfolio in a listed version was made against the backdrop of huge investor demand for high-income paying investments as well as SA’s shrinking equity market but flourishing bond market,” said Bradford.

“Professional and retail investors simply can’t buy most of the instruments we hold in the fund. There are over 2200 bond instruments listed on the JSE, but availability and liquidity are limited to specialist institutional investors. This ETF gives investors easy access to the full range of instruments available e.g. higher yielding bonds issued by SA’s major banks.”

Bradford said that bonds continue to be a misunderstood and underappreciated asset class, yet SA bonds are offering some of the highest yields in the world.

“Current bond yields of over inflation +6% creates the potential for equity-like returns going forward, but with much lower risk. Our new Active Income ETF will give professional and retail investors a convenient vehicle to cost effectively access these high-yielding instruments in a diversified portfolio.”

Reg 28 compliant, the fund is also suitable for compulsory investments such as pension and provident funds, and retirement annuities.

It will be managed by the same award-winning team, led by Bradford, that has been managing income funds with the same mandate for almost a decade.

About PortfolioMetrix:

PortfolioMetrix is an investment management business managing global assets totaling approximately R70 billion. Founded in 2010, our investment process consistently delivers market-leading performance in both multi-asset and single asset class solutions. Our pioneering efforts have been recognised through multiple industry awards, including those for investment performance and process, innovation, disruption, client service and adviser satisfaction.