Sygnia’s Itrix ETFs: Same products, lower fees

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Nonhlanhla Kunene | 2018

Low fees and broad market exposure – it’s small wonder that exchange traded funds (ETFs) have seen a meteoric rise in popularity. So popular in fact, that the Financial Times predicts a record $400bn will be held in US equity ETFs in 2018.

But it doesn’t end with the fees and exposure. The low barrier to entry provided by ETFs has also seen them hailed for having “democratised” investing by making it accessible to the average Joe.

Whether it’s commodities, bonds, different sectors and industries, currencies and more, the choice is wide-ranging. Now that range has widened: Sygnia, which recently took over Deutsche’s db X-trackers, launched four brand new additions to its ETF portfolio, dubbed the Itrix range, and conisisting of the:

• Sygnia Itrix Top 40 ETF, providing exposure to South Africa’s best-known index (JSE Top 40 index)
• Sygnia Itrix SWIX40 ETF, which tracks the movement of the FTSE/JSE SWIX 40 Index
• Sygnia Itrix S&P 500 ETF, which give access to the single best gauge of leading US-based companies, and
• Sygnia Itrix Global Property ETF to diversify your portfolio with exposure to 40 leading global property companies

Savetaxfree.co.za spoke to Ben Meyer, head of Sygnia Itrix, to find out what the idea was behind the new range.

He says the new range was born out of the firm’s desire to offer additional investment options that were not already covered by the ETFs acquired from Deutsche Bank. Over and above this, Meyer says introducing a range that will be managed internally has enabled Sygnia to bring a choice of products to the market at an exceedingly low cost

“We took a decision to leave the service providers of the original DB ETFs the same for now – ie, asset management by Mellon Capital Management and administration by BONY in Ireland – in the interest of continuity. We are using the opportunity afforded by the introduction of new ETFs to do the administration as well as the asset management ourselves and that allows us to offer them to the market at a very low total expense ratio of between 0.15% and 0.25%, depending on the ETF.

Meyer says the Itrix range will allow clients who like the Sygnia brand the opportunity to access a more rounded suite of ETFs instead of being limited to just the initial offering, adding that the firm will be further expanding the range by launching the Sygnia Itrix 4th Industrial Revolution Global Equity ETF by end November, which, according to Sygnia CEO, Magda Wierzycka, provides exposure to 13 market indices, representing diverse ‘new economy’ industries, including self-driving vehicles, drones, virtual reality and genetic engineering, to name a few. It doesn’t end there however, as the company still hopes to launch an Emerging Markets as well as International Bond ETF in the near future.

Meyer says the main aim of the Itrix range was bringing the same products to investors at lower costs. “The management fees charged for the Sygnia Itrix Top 40 ETF, Sygnia Itrix SWIX 40 ETF and the Sygnia Itrix S&P500 ETF is 0.10% plus VAT.  The management fee for the Sygnia Itrix Global Property ETF is 0.15% plus VAT.”

In fact, by choosing the Itrix range, Meyer believes investors stand to benefit not only from what he believes are the lowest management fees available, but the firm also intends reducing trading costs by offering tight bid-offer spreads, as well as by providing the option of investing through the Sygnia Alchemy platform at the lowest platform fees available in SA.

And the cherry on top? Besides the low management  and administration fees, all of Sygnia’s Itrix ETFs are eligible as tax-free investments.