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The Asset Class: Siobhan Simpson · Strictly Business

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  You're listening to Strictly Business Podcast with Lindsay Williams.
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  With me is Siobhan Simpson, Head of SA Unit Trusts at 91,
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  on the day that 91 has listed two actively managed exchange-traded funds on the JSC.
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  First of all, Siobhan, congratulations.
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  And before we get to the details of the funds themselves, why now after 35 years?
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  Thanks, Lindsay, and good to be here this morning.
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  You know our business really, really well.
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  So I...
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  I'm sure you can actually appreciate that this listing now brings those 35 years of
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  active experience that you talk about
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  into a listed accessible format.
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  Our goal is always to help clients stay diversified, liquid, invested, and even in
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  difficult times.
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  So we really are agnostic about what wrapper the client wants to use to really
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  gain access to our expertise.
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  For us, It's another way 91 is evolving to suit investor needs.
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  And this time, just bringing our active edge to the listed market.
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  It really is, there's much more exciting things to come as well.
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  This is just the start.
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  We're not only launching in South Africa.
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  The launch is part of our global plan.
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  We're starting here in South Africa, where obviously 91's roots run really deep.
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  So that made perfect sense for us.
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  But these listings mark the first of the beginning of a broader international
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  rollout with launches in the US.
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  Frankfurt and London to follow soon and then locally also some more for us next
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  year.
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  Okay I'll put that down in my diary because that means I'm going to be
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  speaking to you much more often in the future Siobhan.
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  Now you kindly sent me a press release and I saw the phrase evolving client needs.
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  Is this listing or are these listings as a result of clients saying this is what we
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  want because of what is happening globally for
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  example?
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  So in part yes Lindsay and it's really to broaden our reach.
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  So I think...
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  You know, ETFs have been around for a long period of time.
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  A lot of people recognize them really in the passive space.
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  And actively managed ETFs are really an evolution from that.
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  They're dynamic.
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  They're actively managed ones.
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  Our investment teams are obviously trying to outperform an index based on their
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  research.
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  So, really, it's about having an active option now in the ETF space.
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  There's been an increase in the number of alternatives that you can buy, the number
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  of actively managed ETFs.
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  And then really it's the investors.
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  It's attractive for a different set of investors.
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  The ease of access, low minimums make ETFs appealing for a new generation.
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  And I think sometimes we think it's about age and a younger generation.
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  And it's not only about that.
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  We've all become used to real-time experiences, whether we're shopping,
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  banking, managing our lives on an app.
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  And actively managed ETFs bring that accessibility to investing,
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  allowing clients to see and manage their investments in a way that feels familiar
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  and in step with the times, really.
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  What's happening globally, talking about being in step with the times?
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  Let's look at the global picture when it comes to actively managed ETFs.
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  Because when I think of an ETF, and I think a lot of other people are the same,
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  they think of a passive investment.
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  You put your money in, you take your money out, and that's the end of it.
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  Clearly not the case with the actively managed offering.
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  Yes.
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  So like you say, ETFs, I think, have that traditional passive mindset.
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  But the ETF industry globally is $18 trillion,
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  and it's obviously expected to reach about $25 trillion in the next three to four
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  years.
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  And active ETFs are actually the fastest growing segment of that ETF market.
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  More than half the launches last year were active strategies globally.
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  And like you say, it combines the benefits of the transparency, the efficiency of the
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  wrapper together with...
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  actually being able to outperform an index.
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  In South Africa, passive ETFs have been around for years,
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  but active ETFs were only allowed in 2022.
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  And active ETFs in South Africa are only 6% of the overall ETF market.
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  So a lot of room for growth in the space.
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  Right, let's get to the products themselves now.
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  Tell us about the two ETFs that you've launched.
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  So we're starting with two income ETFs, one local, one global.
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  The first is 91 Diversified Income.
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  And it's a RAN-based Reg 28 compliant portfolio and focused on generating
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  reliable income living capital.
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  It's a multi-asset income solution diversified across South Africa and a
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  little bit of offshore,
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  a yield of nearly 9% at the moment.
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  So a nice tick up above cash.
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  And then on the global side, it's 91 global diversified income.
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  It's a RAN feeder into the global US dollar income fund.
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  And really for clients wanting to get offshore, taking money.
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  offshore into a fee to dollar, but not wanting to go into the markets yet.
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  So a yield of just below 5% and for investors who want diversified global
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  exposure, but not into the market.
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  When you said global diversified income, I immediately thought of interviews that
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  I've done regularly with the fund manager
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  for the Global Diversified Income Fund.
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  Now, the question here is that why suddenly actively manage ETFs?
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  How do they complement the existing suite of products that you have.
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  Lindsay, both of these products are available in a Unitrust format.
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  So this is just a different wrapper.
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  It's the manufacturing, the underlying manufacturing is the same.
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  It's just the wrapper that some clients will choose to access the expertise in is
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  different.
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  That's really what this is, allowing a different set of investors to access our
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  expertise.
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  Are you expecting a different set of investors to take up this offering quite
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  enthusiastically?
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  Is that what you hope, obviously?
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  Oh, we definitely hope that.
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  We believe in the underlying manufacturing capabilities within our business, globally
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  integrated teams.
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  And I think that's why we want to get this active expertise to as many people as
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  possible and give them access.
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  Siobhan, thank you very much for your time.
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  Siobhan Simpson is head of SA Unit Trusts at 91.
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  Exchange-traded funds are listed on an exchange and may incur additional costs.
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  Past performance is not a reliable indicator of future results.
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  The value of investments can fall as well as rise.
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  The portfolio as mentioned operates as white label funds under the Prescient ETF
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  scheme,
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  which is governed by the Collective Investment Scheme Control Act.
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  The management company Prescient and trustee are registered and approved under
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  the Collective Investment Schemes Control Act
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  No. 45 of 2002.
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  Prescient and 91 are members of the Association for Savings and Investments
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  South Africa.
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  The views and opinions expressed in these podcasts are those of Lindsay Williams and
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  various contributors and do not reflect the policy,
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  position or opinion of any other agency, organisation,
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  employer or company associated with StrictlyBusinessPodcast.com.
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  entity other than the speaker or the author.
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  And since we are critically thinking human beings, these views are always subject to
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  change,
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  revision and rethinking at any time.
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  Please do not hold us to them in perpetuity.