South African investors who are looking for an opportunity to invest in smart cities need to look no further following the listing of the Satrix Smart City Infrastructure Feeder Exchange Traded Fund (ETF) on the Johannesburg Stock Exchange (JSE) today. This ETF tracks the performance of companies that invest in infrastructure and technologies that transform cities into smart cities. The fund also aims to advance the following Sustainable Development Goals (SDGs) outlined by the UN:6: Clean Water and Sanitation

7: Affordable and Clean Energy

9: Industry, Innovation, and Infrastructure

11: Sustainable Cities and Communities

12: Responsible Consumption and Production

The emergence of smart cities is one of the key megatrends shaping the world today, which is driven by rapid urbanisation as millions of people relocate from rural towns to major cities. Smart cities distinguish themselves by utilising information and communication technologies (ICTs) to increase operational efficiency, thereby improving the quality of their services and the welfare of residents.

The listing of the Satrix Smart City Infrastructure Feeder ETF brings the number of ETF listings on the JSE to 90 with a total ETF market capitalisation of more than R114 billion. The ETF tracks the STOXX Global Smart City Infrastructure Index, which is made up of a minimum of 80 companies that offer innovative technology-backed solutions for smart cities.

Adèle Hattingh, Business Development and Exchange Traded Products Manager at the JSE, said she was pleased with the continued growth of ETF listings, which will give both institutional and retail investors an opportunity to diversify their portfolios at a low cost while meeting their environmental, social, and governance (ESG) objectives.

“We congratulate Satrix for developing this innovative product that gives an investor exposure to developed and emerging market companies that provide services and solutions for the efficient running of Smart Cities,” Hattingh adds. 

Siyabulela Nomoyi, Quantitative Portfolio Manager at Satrix, says Satrix’s megatrends strategy aims to make global investment megatrends accessible to South African investors through cost-effective, efficient index exposure to appropriate segments of the offshore market.

“The Smart City Infrastructure Feeder ETF is a thematic fund and the latest in a range of Satrix index trackers that invest across sectors and territories, into companies that will leverage the aforementioned megatrends, with a specific focus on those that offer innovative technology-backed solutions for smart cities,” Nomoyi explains.

The ETF’s underlying portfolio has exposure in sectors that include industrials (47.4%) information technology (36.8%), communication services (6.3%), and materials (3.4%).