In less than 20 years, exchange-traded funds have gone from almost unknown in South Africa to holding hundreds of billions of rands — giving ordinary investors access to diversified portfolios that were once only available to institutions.
What Exactly Is an ETF?
An ETF is a basket of securities that trades on the JSE exactly like a share. When you buy one ETF unit, you own a tiny slice of every company (or bond, or commodity) inside it.
Key difference from unit trusts
ETFs trade all day at market price; unit trusts are priced once daily at net asset value.
Growth of ETFs in South Africa
First ETF listed
2000 – Satrix 40
Today
Over 80 ETFs & ETNs, >R130 billion in assets
The Cost Revolution
The average total expense ratio (TER) of local ETFs is now below 0.30% per year — and several global and S&P 500 trackers sit at 0.10–0.17%.
Typical active unit trust
- 1.0–2.5% per year
Typical ETF
- 0.10–0.40% per year
What You Can Own Today
Local indices
Top40, All Share, Dividend Aristocrats
Global developed markets
MSCI World, S&P 500, Nasdaq-100
Sector & theme
Property, resources, Africa ex-SA, ESG
Things to Understand
ETFs have made proper diversification cheap and simple, but they still carry full market risk — if the underlying index falls 30%, the ETF falls roughly the same.
“The ETF revolution has given South Africans the same
building blocks used by the world’s largest pension
funds — at a fraction of the cost.”
— Nerina Visser, etfSA