Satrix shares…the (long) history of ETFs in South Africa

*This content is brought to you by Satrix

By Helena Conradie*

Helena Conradie, CEO, Satrix

I spend a lot of time reading the financial press. This allows me to understand the landscape better and deliver what our investors want. Recently I’ve been noticing that Satrix investors are getting younger and younger, which makes me extremely happy because everyone needs to take their money seriously and the earlier the better! But what I’ve also realised is that some of them are too young to know the story of ETFs in South Africa and especially the unique story of Satrix – the architect of ETFs in SA.

Despite our shortcomings politically and economically, South Africa’s financial services sector has always been progressive, offering investors world class investment opportunities and access. One of the best examples of this is our robust and mature ETF market, which to date offers 71 ETFs across all asset classes both locally and globally.

Satrix, the South African ETF pioneer, caused a shake-up in the South African investment space when introducing the country to ETFs in 2000 by launching the first ETF listed on the JSE. The Satrix TOP 40 ETF needs no introduction and serves as the go-to broad market exposure investment option for professional and amateur investors alike. In fact, the Satrix product set and access options have been so transformative to the South African investing landscape that people tend to refer broadly (but erroneously) to all index trackers as Satrix.

Read also: Satrix CEO: How you can benefit from tax free savings accounts

Since that first South African launch we have listed eight more ETFs, bringing the total number of available Satrix ETFs to nine. In fact, our most recent listings were in February this year when we added a property ETF and an inflation-linked bond ETF to our range. You can now build a completely diversified portfolio of local asset classes using only low-cost Satrix ETFs.

But we soon realised that listing the first ETF wasn’t enough. Our investors needed a cost-effective way to access the ETF even if they couldn’t access the JSE in its entirety. This saw the launch of the (revolutionary at the time) Satrix Investment Plan in 2006. Trading on the JSE was an expensive and onerous endeavour for smaller investors as one needed to have large sums of money to qualify for a stockbroking account.

Our philosophy has always been to provide stock market access to as many people as possible. The Satrix Investment Plan did just that (albeit mostly in the non-online world). It gave anyone access to Satrix ETFs for as little as R300 per month – no more large minimum amounts. Investors flocked.

Being a pioneering and innovative team first to market with the latest ideas, we realised that we owed it to our clients to make investing ever easier and cheaper (and online). In 2015 we met up with the ground-breaking team at EasyEquities. It very quickly became apparent that the low-cost, no-minimum, online platform they had developed, which allowed fractional share trading, would be perfect for our clients too. It was easy for us to work with EasyEquities as they share our vision of democratising investing for all South Africans. In no time at all we had our very own www.SatrixNOW.co.za platform up and running, which allows you to do everything online with no annual fees and extremely low trading costs. Once again Satrix had listened to what the people wanted and pioneered a solution to make ETF access ever easier and cheaper. With SatrixNOW there really are no excuses as you can invest as little as R10 if that is all you have.

Those investors who have walked this 17-year long road with us have been handsomely rewarded for their trust, loyalty and patience. This is also why we keep improving the landscape for all investors and ETF providers in South Africa. It is our firm belief that everyone in our country should have access to the power of the stock market and we will soon be adding access to international markets to our ETF suite.

Over the next few weeks I will be sharing more Satrix stories with you and debunking myths in the index tracking space right here on BizNews.

As always and till next time, #JUSTSTART.

  • Helena Conradie is CEO of SATRIX
  • Satrix Managers (RF) (Pty) Ltd is an authorised Financial Services Provider and a registered and approved Manager in Collective Investment Schemes in Securities and an authorised financial services provider in terms of the FAIS Act. Collective investment schemes are generally medium- to long-term investments. Unit Trusts and ETFs the investor essentially owns a “proportionate share” (in proportion to the participatory interest held in the fund) of the underlying investments held by the fund. With Unit Trusts, the investor holds participatory units issued by the fund while in the case of an ETF, the participatory interest, while issued by the fund, comprises a listed security traded on the stock exchange. ETFs are index tracking funds, registered as a Collective Investment and can be traded by any stockbroker on the stock exchange or via Investment Plans and online trading platforms.  ETFs may incur additional costs due to it being listed on the JSE.  Past performance is not necessarily a guide to future performance and the value of investments / units may go up or down. A schedule of fees and charges, and maximum commissions are available on the Minimum Disclosure Document or upon request from the Manager. Collective investments are traded at ruling prices and can engage in borrowing and scrip lending.  Should the respective portfolio engage in scrip lending, the utility percentage and related counterparties can be viewed on the ETF Minimum Disclosure Document. The Manager does not provide any guarantee either with respect to the capital or the return of a portfolio. The index, the applicable tracking error and the portfolio performance relative to the index can be viewed on the ETF Minimum Disclosure Document and/or on the Satrix website.
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