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Ballot Voting Procedure - Proposed Amalgamation of the STXCTY with the STXIFR
Satrix Managers (RF) Pty Ltd
Satrix Smart City Infrastructure Feeder ETF
Share code: STXCTY
ISIN: ZAE000311577
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 Amalgamation of the Satrix Smart
City Infrastructure Feeder ETF with the Satrix Global Infrastructure
Feeder ETF
This letter is important and requires your immediate attention.
The purpose of this letter is to inform you of the proposed
amalgamation of the Satrix Smart City Infrastructure Feeder ETF
(source portfolio) with the Satrix Global Infrastructure Feeder ETF
(targeted portfolio) 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.
In terms of Section 99 of the Collective Investment Schemes Control
Act, 45 of 2002 ("the Act"), the proposed amalgamation will proceed
if the majority of investors vote in favour of the amalgamation by
way of the enclosed ballot. Absence of a response will be regarded as
a vote in favour of the amalgamation.
The amalgamation 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 Amalgamation
The Satrix Smart City Infrastructure Feeder ETF is focused on
companies developing smart and sustainable urban infrastructure. Its
holdings typically include firms in smart mobility, digital
infrastructure, clean energy, and urban planning technologies.
The Satrix Global Infrastructure Feeder ETF, although broader in
scope, includes similar holdings, particularly in digital
infrastructure, renewable energy, and transportation systems. It
invests in companies that design, build, and maintain infrastructure
assets globally, including many of the same sectors as the Smart
City Feeder ETF but across a wider range of geographies and
industries.
Both ETFs are thematically linked to long-term infrastructure. Key
commonalities are depicted in the image below:
Category Satrix Smart City Satrix Global
Infrastructure Feeder Infrastructure Feeder
ETF ETF
Core Holdings Utilities, digital Utilities, transport,
infrastructure, green energy, digital
energy infrastructure
ESG / High Focus Integrated in
Sustainability selection criteria
Thematic Urbanisation, smart Urbanisation,
Exposure mobility logistics, energy
transition
Geographic Reach Primarily developed Global – including
markets emerging markets
Benefits of the proposed amalgamation
The following lists the benefits of the Smart City Feeder ETF if the
fund were to move into the Global Infrastructure Feeder ETF.
a) Broader Diversification- The Satrix Global Infrastructure Feeder
ETF holds a more diversified basket of stocks across sectors and
geographies, with this ETF holding 262 stocks while the Smart City
Feeder ETF holds 151. By merging into the Global Infrastructure
Feeder ETF, investors gain exposure to a wider base of
infrastructure opportunities, reducing concentration risk and
enhancing portfolio resilience. The chart below highlights the
sector differences.
b) Improved Liquidity and Scale- Combining assets under one ETF
enhances trading volumes and improves bid-ask spreads. Greater
liquidity results in more efficient pricing and easier trade
execution for investors. Currently, the Satrix Smart City Feeder ETF
has an AUM of R45mil while the Satrix Global Infrastructure Feeder
ETF is R504mil, while their underlying iShares funds have an AUM of
USD$344mil and USD$1.68bil respectively.
c) Stronger Long-Term Growth Potential- Global infrastructure is a
megatrend backed by government spending, global urbanisation, and
the energy transition. The Global Infrastructure Feeder ETF is
better positioned to capture these macro tailwinds, including
exposure to both emerging and frontier markets where infrastructure
growth is accelerating.
Performance Comparison
The below chart illustrates the historical drawdowns of the indices
that are tracked by these two ETFs (in Rand terms).
Figure 1: Drawdowns of the indices tracked by the two ETFs, in ZAR –
to end of Apr 2025. Source: Bloomberg, Satrix
The drawdown chart above, notably, the index tracked by the Smart
City Feeder ETF exhibits a higher drawdown risk profile, with deeper
and more frequent drawdowns, particularly evident in the 2021–2022
period. During that time, the Smart City Feeder ETF experienced
sharp declines approaching 25%, while the index tracked by the
Global Infrastructure Feeder ETF maintained relatively shallower
drawdowns in that same period. The Global Infrastructure Feeder ETF
demonstrates a more stable and resilient performance pattern, with
drawdowns generally recovering more quickly and remaining within a
narrower band. This suggests that the Global Infrastructure Feeder
ETF is less volatile and better cushioned against market shocks,
offering a more defensive profile compared to the higher-risk,
higher-volatility Smart City Feeder ETF. Since July 2013, the index
of the Global Infrastructure Feeder ETF had a historical annualised
volatility of 13.2%, compared to the 16.1% from Smart City's index.
This difference further supports the rationale to consider the more
stable and diversified infrastructure investment from the Global
Infrastructure Feeder ETF.
Differences in Investment Policies
The table below lists the investment policies of both ETFs:
Satrix Smart City Satrix Global Infrastructure Changes and
Infrastructure Feeder ETF Feeder ETF impact
Investment Policy Investment Policy
3.1 The objective of the 3.1 The objective of the The objective is
Satrix Smart City Satrix Global Infrastructure to streamline
Infrastructure Feeder ETF is Feeder ETF is to provide an the product
to provide an investment investment vehicle for offering and
vehicle for investors investors wishing to track enhance investor
wishing to track the the return of the FTSE Global outcomes by
performance of the STOXX Core Infrastructure Index consolidating
Smart City Infrastructure (hereinafter referred to as assets into a
Index (hereinafter referred "the Index") as closely as broader
possible, by investing in fund with iShares Global diversification,
to as "the Index") as Infrastructure improved
closely as possible, by UCITS ETF. Liquidity and
investing in iShares Smart Scale and
City Infrastructure UCITS Stronger Long-
ETF. Term Growth
3.2 The portfolio will apart Potential
3.2 The portfolio will apart from assets in liquid form,
from assets in liquid form, and financial instruments for
and financial instruments the exclusive purpose of
for the exclusive purpose of hedging exchange rate risks,
hedging exchange rate risks, invest in participatory
invest in participatory interests of the iShares
interests of the iShares Global Infrastructure UCFS
Smart City Infrastructure ETF ("the Fund") established
UCITS ETF ("the Fund") under the iShares II Public
established under the Limited Company approved by
iShares IV Public Limited the Central Bank of Ireland
Company approved by the in August 2011. The
Central Bank of Ireland in investment objective of the
August 2011. Fund is to provide investors
with a total return, taking
into account both capital and
income returns, which
reflects the return of the
FTSE Global Core
The investment objective of Infrastructure Index In order
the Fund is to provide to achieve this investment
investors with a total objective, the investment
return, considering both policy of the Fund is to
capital and income returns, invest in a portfolio of
which reflects the return of equity securities that as far
the STOXX Smart City as possible and practicable
Infrastructure Index. In consists of the component
order to achieve this securities of the FTSE Global
investment objective, the Core Infrastructure Index,
investment policy of the the Fund's Benchmark Index.
Fund is to invest in a The Fund intends to use full
portfolio of equity replication techniques in
securities that as far as order to achieve a similar
possible and practicable return to the Benchmark Index
consists of the component and it is therefore expected
securities of the STOXX that the Fund will hold each
Smart City Infrastructure and every underlying
Index, the Fund's Benchmark constituent of the Benchmark
Index. The Fund intends to Index at all times or hold
use optimisation techniques them in the same proportion
in order to achieve a as their weightings in the
similar return to the Benchmark Index. The
Benchmark Index and it is Benchmark Index measures the
therefore not expected that performance of the largest
the Fund will hold each and and most liquid infrastructure
every underlying constituent companies across developed and emerging
markets which comply with FTSE's size, liquidity and
of the Benchmark Index at free- float criteria.
all times or hold them in
the same proportion as their
weightings in the Benchmark
Index. The Fund may hold 3.3 The portfolio shall not
some securities which are buy or sell securities for
not underlying constituents the purpose of making a
of the Benchmark Index where profit nor for any purpose
such securities provide other than tracking the
similar performance (with return of the Index.
matching risk profile) to
certain securities that make
up the Benchmark Index. 3.4 The Trustee shall ensure
However, from time to time that the investment policy
the Fund may hold all set out in the preceding
constituents of the clauses is adhered to.
Benchmark Index. The
Benchmark Index measures the
performance of companies of
developed and emerging
market companies that
provide services and
solutions for development
and efficient running of
Smart City infrastructure in
a sustainable manner which
comply with STOXX's size,
liquidity and free-float
criteria.
3.3 The portfolio shall not
buy or sell securities for
the purpose of making a
profit nor for any purpose
other than tracking the
return of the Index.
3.4 The Trustee shall ensure
that the investment policy
set out in the preceding
clauses is adhered to.
Portfolio Benchmark Portfolio Benchmark The objective is
to streamline
STOXX Global Smart City FTSE Global Core the product
Infrastructure Index Infrastructure Index offering and
enhance investor
outcomes by
consolidating
assets into a
fund with
broader
diversification,
improved
Liquidity and
Scale and
Stronger Long-
Term Growth
Potential.
Distribution Methodology Distribution Methodology Distribution
frequency
Distributing Annually Distributing quarterly changed From
Annual to
Distributing
Quarterly.
Total Expense Ratio Total Expense Ratio The objective is
to streamline
37 bps 78 bps the product
offering and
enhance investor
outcomes by
consolidating
assets into a
fund with
broader
diversification,
improved
Liquidity and
Scale and
Stronger Long-
Term Growth
Potential.
Impact of Change – Additional Information
Satrix Smart City Satrix Global
Description Infrastructure Feeder ETF Infrastructure Feeder ETF
(Source portfolio) (Target portfolio)
JSE Code STXCTY STXIFR
Global – Equity – Global – Equity – General
ASISA Classification Unclassified
Risk Profile Aggressive Aggressive
Currency Risk Yes Yes
Geographical, Diversified outside of the Diversified outside of the
Political & Economic South African market South African market
Risk
Asset allocation Offshore Developed Equity Offshore Developed &
- 100% Emerging Equity - 100%
Benchmark Indices STOXX Global Smart City FTSE Global Core
tracked Infrastructure Index Infrastructure Index
Portfolio Holdings Feeder structure, holding Feeder structure,
the iShares Smart City holding the iShares
Infrastructure UCITS ETF Global Infrastructure
as the underlying fund UCITS ETF as the
underlying fund
Fund Denomination ZAR ZAR
Index Rebalancing Annually Quarterly
Domicile Ireland Ireland
(underlying fund)
Distribution Reinvesting Distributing
(underlying fund)
Number of holdings 151 262
UCITS AUM US$383mil US$1.792bil
How the Amalgamation Impacts Your Investment
Replacement participatory interests
When the source portfolio, Satrix Smart City Infrastructure Feeder
ETF is absorbed into and amalgamated with the target portfolio, the
Satrix Global Infrastructure Feeder ETF, investors will be issued
with replacement participatory interests (shares) in the new
amalgamated fund. The replacement shares will be equal in
market/monetary value to the shares held prior to the amalgamation,
although the number of shares held may change. The Satrix Smart City
Infrastructure Feeder ETF (source portfolio) will cease to exist.
This is in accordance with Section 99 (3) (a) of the Act, which
stipulates that on the effective date, every investor:
"…shall… hold in the new scheme or portfolio such participatory
interests with an aggregate money value which is not less than the
lower of the net asset value or market value, as may be fair and
reasonable in the circumstances, of the participatory interests
which such investor, immediately before the date on which the
proposed transaction becomes effective, held in an original scheme
or portfolio;"
Details of the distribution and amalgamation salient dates will be
announced after Financial Sector Conduct Authority ("FSCA")("the
Authority") approval.
Transaction Costs
The change would result in once-off trading costs being incurred
within the source portfolio when the portfolio is liquidated to align
with the targeted portfolio.
Taxation implications
Satrix does not provide tax advice, but there should be no tax impact
for investors who remain in the fund.
Special distribution
The FSCA requires that all accrued income in funds be distributed
prior to the transfer taking place. In line with this requirement,
the targeted portfolios will declare a special income distribution.
Effective date and approval of change
The effective date for the proposed amalgamation of the funds will
be communicated via SENS, contingent upon a successful ballot and
receipt of the requisite approval from the FSCA.
Expected timeline for the implementation of the proposed
amalgamation:
Weekday Action
Thursday, 5 August 2025 Approval from FSCA
Friday, 29 August 2025 Request STRATE register holdings (Cut-off
date for investors on record to be balloted
as at 29 August 2025)
Wednesday, 3 September Release of SENS announcement
2025
Wednesday, 15 October Deadline for returned ballots (30 business
2025 days after SENS announcement)
Monday, 20 October 2025 Submission of auditors report to FSCA
Tuesday, 21 October 2025 Submission of final deed to the FSCA
Friday, 31 October 2025 FSCA approve Supplemental Deed
Tuesday, 4 November 2025 SENS announcement confirming the results of
the ballot and declaration announcement
Action Required
1. Please read this circular on the proposed amalgamation, 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 satrixballotSTXCTY@kpmg.co.za on
or before 15 October 2025. If you do not participate in the ballot
in time, you will be deemed to have voted in favour of the
amalgamation.
3. Please do not include any other instructions regarding your
holdings with your ballot form, e.g., requests for purchases,
switching instructions, etc. Your ballot form will go directly to
our auditors and, should such instructions be sent to the auditors,
we cannot guarantee that any instruction subsequent to the
commencement of the ballot process will be effected.
4. If you are no longer invested in the Satrix Smart City
Infrastructure Feeder ETF, no action is required.
Your Rights As An Investor
The rights of investors are firmly entrenched in the Act. In terms
of Section 99 of CISCA, as read with Clause 59 of the Deed of the
Satrix Collective Investment Scheme in Securities, the Authority
requires that:
• All investors in the affected source portfolios will be informed
in writing on the details of the proposed amalgamation of the
portfolios.
• All source portfolio investors are given an opportunity to vote
in favour of, or against, the proposed amalgamation.
• An independent auditor will verify the outcome of the ballot.
• All investors will be notified in writing of any proposed
material changes to the collective investment schemes and
portfolios in which they hold units, and
• All investors will be given the opportunity to vote on the
proposed changes.
If investors do not respond before the cut-off date, they will be
deemed to have voted in favour of the change.
If the ballot is successful and you do not want your investment to be
included in the amalgamation, you may elect to sell your securities
at any time before the amalgamation effective date and withdraw your
funds at the prevailing market price of the Satrix Smart City
Infrastructure Feeder ETF. Please note that such sale transaction
may trigger a CGT event and that you may be liable for CGT at your
next income tax assessment, and such transaction may also attract
brokerage costs.
If you choose not to sell your funds before the effective date of
the amalgamation, the amalgamation proposals, as set out in this
letter (if approved by investors), will automatically apply to your
investment.
Should you require further information on the proposed change, you
can also email us at info@satrix.co.za.
JSE Sponsor
Vunani Sponsors
3 September 2025
Date: 03-09-2025 12:48:00
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