Thread by @Richards_Karin

Kieran, you are not the only person troubled by this, so I will respond in detail below. Will keep it very simple and basic. May be too simplistic for your needs, but may be of help to others.

https://twitter.com/kdonnellyza/status/1110646438831288321

JSE listed ETFs tracking foreign indexes, such as STXNDQ and STX500 are definitely Rand hedges and excellent ones too. Basically, the underlying assets, which are denominated in US$ are converted at the ruling rand exchange rate to arrive at the currently traded Rand price.
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So if the Rand weakens, the JSE price for the ETF will rise, even if the $ price of the underlying assets has not increased.
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Let's assume you buy 1 share in a JSE listed ETF when the $ price is $10 and the exchange rate 12 Rand to the $ ($/R 12.00).
Your cost would be R12.
If the Rand weakens to 14 ($/R 14.00) and the underlying $ value stays static, the JSE listed price would be R14.
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Thus the value of your investment in the ETF has increased from R12 to R14 - an ↑ of 16%. The full +16% is due to the weakening Rand as the underlying investments, in dollars, have not increased in value. So this is the 'Rand hedge' effect at work.
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Let's look at the STXNDQ. I like this one because the pricing is transparent. The underlying feeder fund is the giant iShares Nasdaq100 which is listed in London and trades in US$. The London code is CNDX.
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The London listed CNDX is the fund you would buy with externalised $'s or £'s.
You buy the STXNDQ here on the JSE. It is the exact same fund, just administered in SA by Satrix as a Feeder Fund. You pay in Rands - the price is effectively the $ price x the $/R exchange rate.
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CNDX is today trading in London at $4.10.
$/R exchange rate is currently 14.60.
So the Rand value of each share is: $4.10 x 14.60 = R59.86.
STXNDQ is currently trading on the JSE at R59.96. Voila!
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The JSE listed STXNDQ is up by 1% today to R59.96 from R59.39 y/day although the underlying $ assets (as in the CNDX) have declined by 0.2% in London. The rise is therefore purely due to the weakening Rand. Again showing the Rand hedging quality at work.
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The JSE STXNDQ has a slightly higher fee than the underlying London CNDX. CNDX has a fee of 0.33%. Satrix adds 0.15% for admin, equating to 0.48%. This is very reasonable imo and less than the cost of opening & maintaining a foreign bank acc just to buy the exact same thing.
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Finally, if the above does not answer the Q fully, just ask. There are always others with the exact same Q and they will thank you.
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