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Frequently Asked Questions - Investing

1. What are the rights of the holders of Property Index Tracker participatory interests?

One Property Index Tracker participatory interest entitles the holder thereof to a proportionate share in the risks in and benefits of the underlying assets of the Property Index Tracker portfolio in which the holder is invested (including a proportionate share in the distributions thereof). As a holder of a participatory interest in a portfolio, one is effectively a co-owner of that Property Index Tracker portfolio.

2. How will the market value of Property Index Tracker securities be determined?

At any point in time the market value of a Property Index Tracker security may be expected to reflect 1/10th of the Index level, plus an amount which reflects a pro rata portion of any accrued distribution amount within the portfolio. Actual market values as reflected by the price at which the participatory interests trade on the JSE may be affected by supply and demand and other market factors, but the ability of a holder to “switch out” of Property Index Tracker securities by redeeming them in specie for one or more baskets of the constituent securities, subject to a minimum participatory interest being delivered, should operate to substantially avoid or minimise any differential which may otherwise arise between the relevant basket price/Index level and the value at which the Property Index Tracker securities trade on the JSE from time to time.

3. How does an investor buy or sell Property Index Tracker securities?

An investor may buy or sell Property Index Tracker securities through a registered member of the JSE or through the manager (or via the market maker).

4. How does an investor find out the price and other information relating to Property Index Tracker securities?

On each trading day the manager publishes the NAV per Property Index Tracker security, the market value of Property Index Tracker securities and the Index level for the preceding day.  Any other information which an investor may require in respect of Property Index Tracker securities and any rights attaching thereto shall be available from the manager on request or on the Property Index Tracker website.

5. How is the Index calculated?

The Index is calculated by the agent on the basis of the ground rules and a specified calculation methodology.

6. Do I earn dividends as a holder of Property Index Tracker participatory interests?

As the constituent companies of any relevant Index declare distributions, such distributions will accrue to the relevant Property Index Tracker portfolio. In addition, scrip lending revenue (if any) generated by that Property Index Tracker portfolio, manufactured dividends earned as a consequence of securities lending transactions utilising constituent securities (if applicable), interest on any cash held and any other income earned will be added to the gross income pool. All costs and expenses (including the management fee) will be deducted from such gross income figure and the net income will be distributed. At the end of every distribution period, the Property Index Tracker portfolio will distribute all of its net income to investors in proportion to the number of participatory interests held by them. The net income available for distribution to investors will be calculated as follows:

Distributions declared by constituent companies  +   PLUS Scrip lending revenue and manufactured dividends (if any) +   PLUS Any interest earned on cash held and any other income - Gross income LESS Costs and expenses = Net income available for distribution (“NI”)

Distribution per participatory interest = N1 number of participatory interests in issue

7. Investment and market risk

There is no guarantee that the Property Index Tracker portfolio will achieve its investment objective of perfectly tracking the Index. The value of the participatory interests and the distributions payable by the Property Index Tracker portfolio will rise and fall as the capital values of the underlying securities housed in the portfolio and the income fluctuate (which fluctuations may be caused by events specific to the constituent companies) and as the expenses of the Property Index Tracker portfolio rise and fall. Property Index Tracker participatory interests can accordingly have a value below the price paid by the investor. Prospective investors should be prepared for the possibility that they may sustain a loss. The Property Index Tracker portfolio may not be able to perfectly replicate the performance of the Index because: the fund is liable for certain costs and expenses not taken into account in the calculation of the Index; certain Index constituents may become temporarily unavailable (for example, due to illiquidity, or a lack of trading, in those securities); or other extraordinary circumstances may result in a deviation from precise index weightings.