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Ballot Voting Procedure - Proposed changes to the investment policy of the Satrix Rafi 40 ETF
Satrix Managers (RF) Pty Ltd
SATRIX Rafi 40 ETF
Share code: STXRAF
ISIN: ZAE000126033
A portfolio in the Satrix Collective Investment Scheme in Securities,
registered as such in terms of the Collective Investment Schemes Control
Act, 45 of 2002
Ballot Voting Procedure - Proposed changes to the investment policy of
the Satrix Rafi 40 ETF.
This letter is important and requires your immediate attention.
The purpose of this letter is to inform you of the proposed changes
to the Satrix Rafi 40 ETF and to provide you with sufficient
information to vote on this proposal – including your rights as an
investor and the impact this will have on your investment.
Satrix intends to transition the benchmark index of the Satrix RAFI
40 ETF from the current FTSE/JSE RAFI 40 (J260) Index to the RAFI
Fundamental Select South Africa 40 Index.
In terms of Section 98 of the Collective Investment Schemes Control
Act, 45 of 2002 ("the Act"), the proposed changes will proceed if the
majority of investors vote in favour of the changes by way of the
enclosed ballot.
The ballot is conducted at the request of Satrix Managers (RF) (Pty)
Ltd ("Satrix"), FSP 15658, the manager of the Satrix Collective
investment Scheme in Securities.
Reason for the Proposed Changes
Key Benefits to moving into the Research Affiliates RAFI Fundamental
Select South Africa 40 Index:
• Similar exposure to the FTSE/JSE RAFI 40 (J260): The RAFI
Fundamental Select South Africa 40 Index uses the RAFI Global
Equity Investable Universe as a starting universe, which results
in a very similar universe to the FTSE/JSE All Share, with the
inclusion of liquidity and size screens. This universe addresses
dual listed constituents and the overall free float methodology
in an identical way to the current JSE methodology.
• Similar Fundamental factors: As a fundamentally weighted index,
the current FTSE/JSE RAFI 40 Index makes use Sales, Cash Flow,
Dividends, Book Value. The proposed RAFI Fundamental Select
South Africa 40 Index makes use of the same fundamental factors,
but with slight adjustments to penalise firms based on their
financial leverage and reward firms for allocations to research
and development. This improves the scores of firms that show
true fundamental strength and penalises those that are over
leveraged. This slight shift in factor definition will provide
investors with a truer fundamentally driven exposure, while
better downweighing firms that only appear to show fundamental
strength. Furthermore, the factor analysis and research is an
ongoing and important aspect of the Research Affiliates
operations, ensuring the improvement and understanding of these
factors are continuously improved and reviewed.
• Rebalance Strategy: The RAFI Fundamental Select South Africa 40
Index makes use of a quarterly staggered rebalance strategy, by
"breaking up" the index into four equal tranches. Once per
quarter, a single tranche will be rebalanced, while the others
are allowed to drift. This is effectively a single rebalance per
year but broken up over 4 tranches. This methodology reduces the
current entry point risk of the FTSE/JSE RAFI 40 index which
rebalances once per year.
The JSE code, ISIN, long and short name remains unchanged, and the
history data will be retained.
Key commonalities- The below table shows similarities between the two
benchmarks:
Criterion FTSE/JSE RAFI 40 Index RAFI Fundamental
Select South Africa
40 Index
Universe FTSE/JSE All-Share Companies within
Index the RAFI Global
Equity Investable
Universe (GEIU)
traded on the South
African exchange
(Dual Listed
Companies included)
Constituents Top 40 companies with Top 40 companies
the largest RAFI with the largest
fundamental scores RAFI fundamental
scores
Fundamental Sales: Annual sales Adjusted Sales:
Weighting Factors (5-year average) Sales multiplied by
equity-to-assets
Cash Flow: Operating ratio averaged over
income + depreciation the past five years
and amortization +
write-ups (5-year Adjusted Cash Flow:
avg.) Operating cash flow
averaged over the
Dividends: Total past five years
amount of annual plus R&D expenses
dividends (5-year averaged over the
average) past five years
Book Value: Equity Dividends +
(excluding hybrid or Buybacks: Average
profit participation dividends paid plus
capital, etc.) (last share buybacks over
year-end value) the past five years
Book Value +
Intangibles: Most
recent book value
plus research
capital*
Capping 10% 10%
Risk and Return on past performance:
The below statistics for the FTSE/JSE RAFI 40 Index are based on the
historical performance of the index, where the RAFI Fundamental
Select South Africa 40 is based off simulated returns.
To September 2025 RAFI Fundamental FTSE/JSE RAFI 40
Select South Africa 40 Index
Index
YTD 25.04% 40.89%
1 Year 18.46% 34.08%
3 Year 16.01% 21.96%
5 Year 20.17% 22.41%
10 Year 13.96% 13.27%
Volatility p.a. 9.29% 13.27%
Total returns to the end of September 2025. Source: JSE, Satrix, Research Affiliates
• When comparing historical performance and risk metrics between
the RAFI Fundamental Select South Africa 40 Index and the
FTSE/JSE RAFI 40 Index (J260), investors will note that the
FTSE/JSE RAFI 40 (J260) has shown stronger overall performance
over a 5-year period (22.41% vs. 20.17% p.a.). However, over a
longer period, the RAFI Fundamental Select South Africa 40 has
seen better performance (13.96% vs 13.27%).
• The RAFI Fundamental Select South Africa 40 index exhibits a
lower annual volatility (9.27% vs 13.27% p.a.). For investors
seeking exposure in more fundamentally strong South African
companies, accompanied by slightly lower risk to return
profiles, the RAFI Fundamental Select South Africa 40 index
proves to be a compelling alternative.
The below shows the most recent top 10 holdings of each index:
FTSE/JSE RAFI 40 (J260) Index:
Company Weight Sector
Sibanye Stillwater 10.23% Basic Resources
Ltd (SSW)
GOLDFIELDS LTD 6.80% Basic Resources
(GFI)
ANGLO (AGL) 6.66% Basic Resources
NASPERS -N (NPN) 6.06% Technology
BRITISH AMERICAN 5.54% Food, Beverage and
TOBACCO PLC (BTI) Tobacco
FIRSTRAND (FSR) 5.19% Banks
Valterra Platinum 4.92% Basic Resources
Ltd (VAL)
MTN GROUP (MTN) 4.89% Telecommunications
IMPLATS (IMP) 4.45% Basic Resources
ANGLO GOLD ASHANTI 3.27% Basic Resources
(ANG)
RAFI Fundamental Select South Africa 40 Index:
Company Weight Sector
BHP Group Limited 10.00% Basic Resources
(BHG)
GLENCORE PLC (GLN) 10.00% Basic Resources
ANGLO (AGL) 9.27% Basic Resources
BRITISH AMERICAN 9.23% Food, Beverage and
TOBACCO PLC (BTI) Tobacco
ANHEUSER-BUSCH 6.56% Food, Beverage and
INBEV (ANH) Tobacco
COMPAGNIE 5.05% Consumer Products
FINANCIERE (CFR) and Services
PROSUS NV (PRX) 4.96% Technology
Valterra Platinum 4.72% Basic Resources
Ltd (VAL)
IMPLATS (IMP) 2.92% Basic Resources
STANBANK (SBK) 2.77% Banks
Figures above: Top 10 holdings, end of September 2025. Source: Satrix, JSE, Research
Affiliates
• The Research Affiliates RAFI Fundamental Select South Africa 40
index provides a relatively similar exposure to the FTSE/JSE
RAFI 40 (J260) index as seen in figure 2 above. In the top 10,
the resources exposure is approximately 36.9% for the Research
Affiliates RAFI Fundamental Select South Africa 40 Index and
approximately 36.3% for the FTSE/JSE RAFI 40 (J260), resulting
in a similar overall exposure for investors. This similarity
shows how the new Research Affiliates RAFI Fundamental Select
South Africa 40 Index captures the effect of fundamentally strong
companies listed on the JSE, which J260 has traditionally done.
• The FTSE/JSE RAFI 40 (J260) index aimed to provide a tailored
exposure to companies showing strong fundamental characteristics
in South Africa. The alternative, the Research Affiliates RAFI
Fundamental Select South Africa 40 Index achieves the same goal
but with additional aspects that highlight strong fundamentally
performing companies. This index has a slightly lower return
profile with lower volatility, while using a very similar
starting universe and fundamental weighting methodology. The
Research Affiliates RAFI Fundamental Select South Africa 40
Index makes use of a quarterly staggered approach, reducing the
entry point risk of a standard rebalance approach.
Differences in Investment Policies
The table below lists the current and proposed investment policies:
Current Proposed Changes and
impact
Investment Policy Investment Policy
The investment policy of the The investment objective of The portfolio
portfolio shall be to track the Portfolio is to provide will no longer
the RAFI 40 Index as closely an investment vehicle for track the
as possible, by buying only investors wishing to track FTSE/JSE RAFI 40
securities in the same the movement of the RAFI (J260) Index but
weightings in which they are Fundamental Select South will track the
included in the RAFI 40 Index Africa 40 Index ("the Index") movement of the
and selling only securities as closely as possible, by RAFI Fundamental
which are removed from the investing predominantly in Select South
RAFI 40 Index from time to equity securities of Africa 40 Index.
time as a result of annual companies which are primarily
Index reviews or corporate constituents of the Index.
actions or which are required
to be sold to ensure that the
portfolio holds securities in The Portfolio shall seek to
the same weightings as they achieve this objective by
are included in the RAFI 40 investing as far as is
Index; and possible and practicable in
the constituents of the Index
as well as assets in liquid
The portfolio shall not buy form and financial
or sell securities for the instruments for efficient
purpose of making a profit portfolio management
nor for any purpose other purposes. The manager intends
than tracking the RAFI 40 to use physical tracking
Index. techniques such as full
replication and where
necessary portfolio
It is anticipated that assets optimisation in order to
in liquid form will not form achieve a similar return to
a substantial part of the the Index. It is therefore
portfolio's assets. However expected that at most times
any liquid assets that the the Portfolio will hold each
portfolio holds may be and every underlying
invested in short-term constituent of the Index in
investments such as banker's the exact same proportion as
acceptances and certificates their weightings in the
of deposit. Index. However, from time to
time the Portfolio may not
hold all constituents of the
Index. The combination of
The portfolio will acquire shares will enable the
and hold a portfolio of Manager to track the
securities that substantially performance of the Index.
represents all of the
securities of the RAFI 40
Index in substantially the
same weightings as in the The Portfolio endeavours to
RAFI 40 Index. However the replicate the price return
portfolio shall also be performance of the Index in
entitled, in its discretion South African Rand (ZAR).
and only on a temporary
basis, to invest in
derivatives as will most The Portfolio's ability to
effectively give effect to track the price return
the object or the investment performance of the Index will
policies of the portfolio. be affected by, amongst
others, the costs and
expenses incurred by the
The portfolio will hold Portfolio and the exposure to
securities purely for the liquid assets.
economic rights and benefits
attaching thereto, and
accordingly if a takeover bid
is made for shares of a
company included in the RAFI
40 Index, the portfolio will
not tender shares in respect
thereof. Securities held by
the portfolio which are
subject to a takeover bid
will only be surrendered if
such surrender is mandatory
(and then only to the extent
of such mandatory surrender)
in terms of applicable law or
under the rules of a
regulatory authority or body
having jurisdiction. If a
takeover bid results in a
company no longer qualifying
for inclusion in the RAFI 40
Index, any shares of the
company held by the portfolio
after the takeover bid will
be disposed of by the
portfolio, and the proceeds
will be applied in effecting
the appropriate adjustments
to the portfolio.
The portfolio's ability to
replicate the price
performance of the RAFI 40
Index will be affected by,
amongst others, the costs and
expenses incurred by the
portfolio and the exposure to
assets in liquid form.
Portfolio Benchmark Portfolio Benchmark
Change of
FTSE/JSE RAFI 40 (J260) Index RAFI Fundamental Select South Portfolio
Africa 40 Index Benchmark
Distribution Methodology Distribution Methodology
Distributing quarterly Distributing quarterly No change
Total Expense Ratio Total Expense Ratio No change
0.50% 0.50%
Long Name Long Name No change
Satrix Rafi 40 ETF Satrix Rafi 40 ETF
The Effect on you as an Investor
The proposed change to this portfolio will change investors' exposure
from equity securities, included in the FTSE/JSE RAFI 40 (J260) Index
to equity securities included in the RAFI Fundamental Select South
Africa 40 Index.
Transaction Costs
The change could result in additional trading costs being incurred
when the portfolio is rebalanced to align with the new methodology.
Satrix does not provide tax advice, but there should be no tax impact
for investors who remain in the fund.
Special Distribution
No special distributions will be effected or applicable.
Taxation implications
Satrix does not provide tax advice, but there should be no tax impact
for investors who remain in the fund.
Effective date and approval of change
Details of the final salient dates will be announced after Financial
Sector Conduct Authority ("FSCA")("the Authority")approval.
Proposed timeline for the implementation of the proposed ballot:
Weekday Date Action
Monday 14 April 2026 Approval from FSCA
Receive investor holdings per STRATE
Tuesday 28 April 2026
Register (as at 24 April 2026)
Release of announcement on JSE SENS
Wednesday 29 April 2026
for the ballot
Final date of response to the ballot
Thursday 11 June 2026 letter
(30 business days after distribution)
Friday 19 June 2026 Satrix submit audit report to FSCA
FSCA approve audit report and
Friday 3 July 2026
supplemental deed
Monday 6 July 2026 JSE formal approval
Thursday 9 July 2026 Publication of ballot results
Tuesday 20 July 2026 Effective date of change
Action Required
1. Please read this announcement on the proposed change to the fund,
your rights as an investor, and the impact this will have on your
investment.
2. Please complete the enclosed ballot form and email it directly to
our external auditors, KPMG, at satrixballotSTXRAFETF@kpmg.co.za
on or before 11 June 2026.
3. Please do not include any additional instructions regarding your
holdings with your ballot form, such as requests for purchases or
switching instructions. Your ballot form will be sent directly to
our auditors. Should instructions be sent to the auditors after the
commencement of the ballot process, we cannot guarantee that they
will be implemented.
4. If you are no longer invested in this fund, no action is required.
Your Rights as An Investor
The rights of investors are firmly entrenched in the Act. In terms
of Section 98 of CISCA, as read with Clause 59 of the Deed of the
Satrix Collective Investment Scheme in Securities, the Authority
requires that:
• All investors are notified in writing of any proposed material
changes to the collective investment schemes and portfolios in
which they hold units.
• All investors are balloted to vote on the proposed changes.
• An independent auditor will verify the outcome of the ballot.
Please note that under the Act, the Authority will not consent to
changes to the portfolio unless satisfied that such changes will not
be detrimental to the interests of any investor.
At least 25% in value of investors, excluding the manager must respond
in writing of which the majority must agree to the amendment.
If you choose not to switch or sell your funds prior to the effective
date of the change of the investment policy as set out in this letter
(if approved by investors), the amended investment policy will
automatically apply to your investment.
Should you require further information on the proposed change please
contact Satrix Managers via email to info@satrix.co.za.
JSE Sponsor
Vunani Sponsors
29 April 2026
Date: 29-04-2026 10:00:00
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