Strategic equity position that benefits from Rand strength       

Zshares RandPlay is a new, innovative and dynamic ETF developed specifically for the South African stock market investor. Much of the volatility that occurs in South African stocks relate to movements in the exchange rate. South Africa is in a unique position as a small open economy where changes in the exchange rate can have a significantly positive or negative effect on different sectors of the South African stock market.

Investment Philosophy

Zshares offer investors the ability to invest in themes (for example, Rand weakness or Rand strength) in a way that is consistent and easy to understand. The indices that an ETF tracks can either be a generic index or a bespoke index. Zshares RandPlay is an Out of the Ordinary^TM ETF because it focuses on a popular investment theme instead of a regular market weighted index. So instead of owning the market as a whole, investors are able to focus their portfolio on a particular theme by adding exposure to one or more Zshares. This exposure can be adjusted readily as views change due to their tradability.

Zshares RandPlay is an ETF designed to track the Investec RandPlay Index. This index was developed by Investec Bank and is designed to create an optimised South African equity portfolio to out‑perform the FTSE/JSE Africa Top 40 Index when the Rand strengthens, as measured by the Rand/US Dollar exchange rate. 

A statistically robust methodology

The Investec RandPlay index is a bespoke index developed by Investec Bank and calculated by the FTSE/JSE. The index constituents are selected according to a methodology that is entirely quantitative in nature, which aims to optimise a strategic equity position on the JSE. The chosen constituents are then combined in a portfolio that maximises the risk‑adjusted return. This is done within specific constraints. Given that the underlying weightings in the basket may vary during the quarter depending on market movements, the index constituents are reviewed and rebalanced every quarter. Zshares RandPlay therefore offers a statistically robust solution for enhanced index tracking in South Africa.

Companies dependent on domestic demand benefit from a strong Rand

Zshares RandPlay can be seen as a Smart component of your equity portfolio, allowing you to focus on companies that will benefit directly from sustained Rand strength. In general, Rand strength is associated with low inflation and a favorable interest rate environment. Consequently, these companies tend to be assisted by both low interest rates as well as the associated improvement in domestic economic growth. This benefit is reflected in a wide range of sectors including retailers, banks and selected industrial companies. This relationship between sustained Rand strength and domestic orientated companies has been thoroughly tested and is relatively consistent over time.

Stocks that benefit from Rand strength in a single security

The Investec RandPlay model is rigorously tested using multi factor regression technology to ensure the portfolio outperforms as long as Rand strength is attained. In summary, Zshares RandPlay is able to offer a cost effective and tradable portfolio of stocks that benefit from Rand stability in a single security.

Key features

• Focused South African equity exposure
• Companies that benefit from Rand strength
• A Smart component of your share portfolio
• Cost-effective alternative to actively managed funds
• Instant diversification
• Tax efficient Collective Investment Scheme
• Liquidity provided by a dedicated market maker
• Fully transparent
• Intraday trading