2025 ETF surge sets stage for more runway ahead - Nerina Visser, etfSA
South Africa’s exchange‑traded fund (ETF) industry has just marked its 25th anniversary, with assets under management climbing from R165 billion at the end of 2024 to R285 billion by September 2025 - a surge of more than 70% in nine months. Nerina Visser, co‑owner of ETFSA and South Africa’s leading ETF strategist, says the milestone underscores the industry’s growth potential. “There is a lot of runway left,” she told BizNews in an interview. Despite the rapid expansion, ETFs still account for less than 7% of South Africa’s overall investment universe, according to the Associations for Savings and Investments in South Africa. (ASISA). Visser expects that to change in 2026 as more active managers launch listed funds, income‑focused ETFs attract capital, and smartphone platforms remove barriers to entry. She highlights the appeal across investor groups: younger investors are drawn to instant diversification and the ability to start with as little as R300, while institutions and experienced investors value the transparency, speed, and low fees. With the launch of actively managed ETFs on money app, Shyft from Ninety One, investors can now combine professional portfolio management with the ease of digital trading. The platform offers access to more than 1 200 global and local shares and ETFs, available regardless of where investors bank. Visser believes this combination of innovation and accessibility means many more South Africans will begin treating ETFs as a core part of their portfolios rather than a niche alternative in the year ahead.
ETFs have been called the gateway to investing as they're simple, transparent, and with easy-to-use technology like Shyft, today, anyone with a smartphone can access them. Shyft, the award-winning global money app, powered by Standard Bank, offers you investment opportunities in over 1200 global and local shares and ETFs at the cheapest forex rates - and any South African can use it, no matter where you bank.
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Edited transcript of the interview
Linda van Tilburg (00:00)
ETFs have been called the gateway to investing as they are simple, transparent and accessible to anyone with a smartphone. They open the door for first-time investors while still offering seasoned investors the diversification and flexibility they want. And now, with the launch of actively managed ETFs on Shyft from Ninety One, South Africans can combine professional portfolio management with the ease of trading ETFs. To unpack what this means for investors at every stage, I’m joined by Nerina Visser, South Africa’s leading ETF strategist and co-owner of ETF South Africa. Hi Nerina, and welcome.
Nerina Visser (00:32)
Hi Linda, lovely to spend time with you today. I’m really excited about our conversation and perhaps lifting the veil a little bit for investors on Shyft in terms of what this can do for them.
Linda van Tilburg (00:50)
Who better to speak to than the ETF specialist of South Africa?
Nerina Visser (01:12)
Thank you. Yes, this has been a wonderful journey for me from a personal career perspective. It’s something I’ve been involved in for most of the 25 years that ETFs have been available in South Africa. For those of us in the industry, this is par for the course, but I think for many people it still represents something they think is new. Yet it’s been around for 25 years in South Africa. As of last month, November, the ETF industry in South Africa celebrated its 25th anniversary. So certainly not a newbie, a flash in the pan, or a fad – it’s very much part of mainstream investments nowadays.
Linda van Tilburg (01:52)
So, for somebody new to investing, how would you explain what an ETF is?
Nerina Visser (01:58)
For me, probably the simplest way to think about it is that this is a listed unit trust. Many people are familiar with the concept of a unit trust, and an exchange traded fund is still just a unit trust. In other words, the underlying fund looks and feels exactly like the unit trust vehicle we’re all quite familiar with. But the exchange traded – the listed part of it – is what is different. And that really just refers to where I actually buy this investment, how I get access to it. That’s the most important differentiator in terms of access points.
What’s exciting about speaking to the Shyft client base is that they are very familiar with stockbroking and online share trading. What we’re looking at here is something you would access and invest in exactly the same way as you would your individual shares in your stockbroking portfolio. But what you are buying is not shares in an individual company; rather, you are buying units in a unit trust.
The other very important differentiator initially of ETFs is that the underlying investment portfolio – the unit trust you were investing in – was specifically of an index-tracking nature, often colloquially referred to as passive investments. Whereas people often assume unit trusts are necessarily actively managed. Neither of those two assumptions is 100% correct. In fact, we have index-tracking or passive unit trusts as well. And of course, for the last two to three years, we now also have actively managed ETFs available.
So, an important appreciation for investors would be to understand that ETF does not mean passive or index-tracking. ETF means, as the name says, exchange traded fund. It is a fund – a unit trust – that you buy on the Stock Exchange.
Linda van Tilburg (04:46)
Okay, and why are ETFs often recommended as the best starting point for novice investors? It seems there’s a growing interest among younger people. I’ve recently interviewed some school pupils who are now taking part in competitions on the Johannesburg Stock Exchange.
Nerina Visser (04:09)
Absolutely. And I think you’re spot on – it’s younger investors who are more tech-savvy, more comfortable with the apps on their phones that allow them to trade. Those don’t really align talk to the old-fashioned way of investing via a financial adviser, through a LISP – a Linked Investment Service Provider – having to fill out forms and posting them off to the unit trust provider.
ETFs are exactly that access point to the stock exchange, very readily accessible for online share trading or app-based trading. Another important reason why they are often recommended as a great first-time investment is that you are necessarily investing in a diversified basket of shares – a portfolio of investments. In as you know in investing, it is that diversification is one of the most attractive aspects of investing.
You don’t need specialist knowledge of individual shares, the ability to analyse company financial statements, or fancy valuation methodologies that professional investors use for their investment decisions. For the novice investor, buying units in an ETF gives you relatively easy access point to the whole market. It’s a single trade, and you buy exposure to the whole stock market for that matter.
Linda van Tilburg (05:50)
So why do experienced investors also like ETFs? Because they could just pick their own individual shares.
Nerina Visser (05:59)
They certainly could. But there are many reasons why even institutional investors really like the concept of the exchange traded fund. I often joke that ETF stands for Exchange Traded Fund, but for me it also stands for efficiency, transparency and flexibility.
When it comes to efficiency, especially when you think of the institutional investor. It’s a very easy and quick way to get exposure to an entire market or market segment. For example, an institutional investor can decide today that they want to add Japan as an exposure in their overall portfolio, but they haven’t yet gone into the detail of exactly which individual Japanese companies to buy. They can buy an ETF on the Japanese stock market and immediately get efficient exposure to the whole Japanese stock market.
Then, as they do their research and actively select individual shares, they can easily trade out of the ETF – sell the ETF units and buy the individual shares. So, it is very efficient from that perspective.
It's very transparent. ETFs by their nature, especially the index tracking ETFs, are required to disclose the holdings that they've got in that underlying ETF on a daily basis. You don't have to guess or wonder what you actually have in that investment. It's completely transparent. So for the institutional investor, especially if they're using this as part of a bigger portfolio, they know exactly what they've got in this particular part of the portfolio and therefore whatever they add to it or however they add to their portfolio, it's clear there's no ambiguity or uncertainty whether you might be double counting or overexposing or underexposing.
And the flexibility really comes from exactly the flexibility that we know we have on the daily stock market. These things trade not just daily, they trade intraday. That's one of the big differences also between old fashioned unit trusts that are unlisted. So, they've got a once-a-day pricing, two o'clock in the afternoon type of thing. Whereas the ETF trades right throughout the trading day. can buy it, institutional investor can buy it at 10 o'clock in the morning and they can sell it at three o'clock in the afternoon if they want to
So those are just some of the benefits and I'm speaking now sort of you know from a perspective maybe of an institutional investor but quite frankly many of those are also very attractive to retail investors.
Linda van Tilburg (08:46)
So, what type of ETFs are available in South Africa?
Nerina Visser (08:50)
We have a saying: whatever the investment theme or topic, there’s an ETF for that. That’s one of the most attractive aspects of ETFs compared to individual shares – they cover every single asset class.
Just because you buy it on the JSE – the Johannesburg Stock Exchange – doesn’t mean your underlying investments are only South African shares or JSE-listed equities. You can buy bonds or interest-bearing exposure. You can buy listed property companies. You can buy physical commodities like gold, platinum, palladium via ETFs.
Most importantly for South African investors, you can buy global exposure through ETFs on the JSE. So, from the comfort of your local stock exchange and stockbroking portfolio, you have access to the world – equities, bonds, property, different investment styles.
We’re sitting at almost 300 exchange traded products listed on the JSE – more than the number of individual shares available on the exchange. That shows the vast opportunity set for investors once they open themselves up to the amazing world of ETFs and what it can mean in terms of a much-expanded investment universe.
Linda van Tilburg (10:29) So what's the difference between passive ETFs that track an index and actively managed ETFs? And what are the advantages and disadvantages of each?
Nerina Visser (10:40) So, for me, a way to think in terms of index tracking or so-called passive investment, it really is like following a recipe tobake a cake, if I can call it that. Basically the index tells you exactly what the constituents and the weights are that's in the index. So, if I go back to my recipe analogy, it basically tells you what the ingredients are and what are the quantities that I need to use. And as maybe a novice baker, if I'm not quite sure exactly how I'm going to make this cake that I want to put together, would use a recipe and follow the recipe and I do exactly what the index says. I buy the shares or the assets that's in the index in exactly the same quantities or proportions that is defined by the index. And that's really what index tracking is. I replicate; I do exactly in the portfolio what is done in the index.
Actively managed funds differ in the sense that they would look different from the index. They could use the index as a starting point and then say, well, you know what, I feel more positive on this particular company or sector and less positive on that company and sector and therefore I would add more, go overweight or only buy the ones that I'm positive on and I would reduce the weight or even not hold at all the ones that I'm less positive on. So, active management very much requires the skills of an expert investor.
Somebody would sit there and take a view on individual shares or individual sectors or individual markets. Whereas index tracking is an investment style or a strategy that requires the asset manager of that fund to just replicate whatever is in the index. And that's a very important differentiation because when we look at how do we assess an actively managed fund relative to an index tracking or a passive fund.
When it comes to the actively managed fund, you're really relying on the skill and the expertise of that individual or that team that makes those active decisions. Whereas in the case of an index tracking fund, the basis for that is really the index rules. How do they decide how much of what goes into the index? So, you as an investor who have to select between an actively managed fund or an index tracking fund. In the case of the index tracking fund, you really need to sort of review the index and say does this thing actually do what I want it to do to achieve my investment objective. So, it's very different way of thinking about your investment between these two different types of investment styles, if I can call it that, actively managed versus index tracking.
Linda van Tilburg (13:29) Well, if you want that skill or expertise you've been talking about, NINETY ONE has just launched actively managed ETFs on Shyft - that's a place where you can go.
Nerina Visser (13:48)
Absolutely. Yes, I think what is for me so wonderful about this launch of Ninety One, they've certainly got an incredible track record, not just in South Africa, but as a global asset manager of having excellent active management skills. But for a long time, the perception was that an ETF is, let's call it passive or index tracking. So, for an active manager such as Ninety One this was not something that they would have really considered before. But with the advent of actively managed ETFs now being available on the JSE, that allowed Ninety One to come to the market and say, we have this great skill of our active managers, but we can now make those investments available to you, the investor, not just via our traditional channels of either coming directly to us as Ninety One or via a financial advisor on a linked investment service provider platform.
You as an investor can now buy our skill, our expertise of our actively managed funds directly on the stock exchange. And this really is quite a game changer, I think, in terms of both from the asset management side, so asset managers like Ninety One that now suddenly have a very different and new potential market who can come and invest in their products. But for the investor, it also presents an amazing opportunity set to say, I can think beyond traditional index tracking ETFs and I can actually introduce these actively managed strategies also into my, let's call it my ordinary stockbroking portfolio.
Linda van Tilburg (15:22)
Okay, so I have a smartphone and say I want to make my first ETF investment with Shyft. How do I go about?
Nerina Visser (15:58.518)
Well, I think what's important here is having a sense of what is my investment objective. What is the need that I'm trying to fall for? I think so often we find that especially novice investors want to jump into something which has recently done really well, the hot stuff, you know, and they look at past performance. They would go and say, what is the share or the ETF or the unit trust or whatever it might be that's given the best performance over the last year? we now at the time of year also where there's lots of best of 2025 type of lists. But that's probably the worst basis on which you can make an investment decision. That's like driving your car by looking in the rear-view mirror. Guaranteed you're going to make an accident somewhere along the lines.
How do we invest for the future? The investing for the future is about determining what are my objectives? Am I looking for an investment that can give me strong capital growth over the long term. Am I looking for an investment that can serve income needs that I might have in the relatively short term? Am I looking for a fairly balanced, well diversified, multi-asset type of exposure for a medium term? So the starting point is really what is your objective?
And then it is about identifying what type of asset class or type of investment would suit that. Now, I'm going to keep it really simple and say, if my investment objective is a short-term income or cash flow need, I'm probably looking for an income fund or a money market fund, something with very little market risk, but something that will give me good interest income.
If my target is long term capital growth, I really want to expose myself to areas where I can get the best capital growth over the long term and that typically would be equities, global equities. We know that equities over the short term can be quite volatile but over the long time that's where you get your inflation beating returns.
If it's more of a medium-term profile and maybe I'm looking for something well-diversified, well-balanced over a say a five-to-seven-year period I'm probably looking for a balanced fund or a multi-asset fund that will give me exposure to multiple asset classes equities, bonds, property, commodities, local and global and so on. And so, for me, that would be the starting point.
So, you would start to look at the type of funds. I'm just going to say, let's say it's an income fund, or it would be a balanced fund, or it would be a global equity fund, for example. And then I think one wants to keep it quite simple. You want to start off with something that really just covers that particular asset class quite well. So, if I'm going to be looking at something like global equities for example. Well, you know we have ETFs that give you total world equity that invests in like 10,000 companies around the world. You don't have to sit there and try and second guess which are going to be the best over the next 10 years or so. You buy the whole world, and you get that performance.
On the short term, you want to be looking for something like Ninety One has now brought, for example, that gives you better interest income than you will get in a savings account. But you're going to be looking for your domestic income fund that can give you that good interest rate. And for the medium term, look for a balanced fund, a multi-asset portfolio, fairly simple and straightforward, low cost. You always want to focus on investments that have lower costs because the more you've got to pay away at cost, the less return you keep your pocket so those would be the criteria, and you start there.
Then once you start it, continue the journey of educating yourself, of learning more. The Shyft platform and Standard Bank has done amazing work in terms of investor education. Make use of those opportunities to learn more about what is it that I'm invested in? How does it work? What drives the performance? Where is it coming from? And become an informed and educated investor. Do it with a consistent basis and that will be your investment success. Not by looking at who was best performer over the last day or month or year or whatever and then jumping on that old hot bandwagon.
Linda van Tilburg (19:51)
Well, for somebody who's new to investing says, this all sounds like big money, I don't think I have enough, you know, to start doing this, what would you say to them?
Nerina Visser (20:03)
Linda, I love that question because I think for me that's probably one of the most underappreciated benefits of ETFs is exactly the fact that not only is it very accessible for small amounts of money. And when I say accessible, it means both that I'm allowed to do it. I can invest like R300 at a time, but it's also a very cost-effective way of doing it.
One of the things about ETFs, because they trade on the stock exchange, it's the same security that trades on the exchange whether you are a small retail investor or whether it is a large institutional investor. When we look at traditional old-fashioned unit trusts, they come with all sorts of fee classes and when you're the big institution, you pay the lowest fees. When you're the small retail investor, well it's a bit of sorry for you, you're going to be paying up.
Not in the world of ETFs. In the world of ETFs, we all pay exactly the same cost inside the fund. And so, when we use terminology such as ETFs have democratised investment, they're giving access to wealth creating opportunities for everyone. It talks to exactly that, that with a modest amount of money, small amount of money, and without the need to actually have expert insight or understanding pay for financial advice. You can access investment, grow your wealth in a very well diversified, very, very well regulated way as well. And that's why we really think that this is the best investment for a novice, a first-time investor, especially if you're a small investor.
Linda van Tilburg (21:46)
Looking to the future, if we look at 2026, what role do you see ETFs both passive and active playing in South African investment journeys?
Nerina Visser (21:59)
Certainly one that it will just continue to grow. You know, when we look at the history of ETFs globally, I mentioned that in South Africa, we've just celebrated the 25th anniversary of ETFs and in fact, globally, it's not that much longer. The very first ETF in the world was listed in 1990. No, not in the US, in Canada. So, they've been around for 30 years. But when we see the rate of adoption and growth in ETFs, we appreciate that there is a lot of runway left, a lot of potential still, because although we've seen spectacular growth in the ETF industry, it still represents a very small part of overall investment portfolios.
Unitrust certainly still dominates investments. In fact, some of the most recent statistics that I saw out of ASISA, the Associations for Savings and Investments in South Africa, put ETF exposure at less than 7 % of the overall investment universe in South Africa
So, it shows you the potential for further growth, but also with this massive expansion in terms of different strategies, different styles of investment and certainly with the introduction of the actively managed ETFs, we will see more like Ninety One has now done, like Coronation has done a few months ago as well. We will see more of the traditional active managers come into the world of ETFs, bring their expertise to investors and therefore I see a lot more growth potential for us in 2026.
I think the other area that's been really interesting for us to observe within the ETF industry is the growth in other asset classes. Traditionally South African stock exchange stock market was built on gold, on mining, on commodities and so on so that's always been a strong feature but it's dominated really by equity investments and it's in recent years that we've seen this growth in interest bearing bond ETFs come to the fore and that is in particular an area where actively managed strategies can really differentiate themselves like we see with the Ninety One actively managed ETFs.
So, for me that's a very exciting space for investors because those typically represent lower risk investment options. For investors who maybe don't have either the risk appetite or the risk tolerance to go for high-flying global equities with lots of volatility. These enhanced income interest-bearing bond ETFs and so on, represent a great way to get good, certainly much better interest income that you're to be getting in a savings account. And you get that experience of learning how to drive your Shyft app, how to actually deal with investments.
So, for me, it's a beautiful sort of marriage of wonderful opportunity for investors and I certainly am excited about what 2026 and beyond holds for investors in South Africa with the opportunity set that ETFs and specifically actively managed ETFs present us.
Linda van Tilburg (25:20)
And the fact that it's now available on Shyft probably could accelerate growth even further?
Nerina Visser (25:26)
Absolutely and I think what would work so well in that digital environment is that we are able to also provide investors with insight, knowledge, understanding, education on demand, but also right there and then. So, you can actually learn about something and then immediately execute on the Shyft app. You can say, oh, I now understand this. This makes sense. This is exactly what I need. And now to execute, don't then have to go off somewhere else, fill in a form or contact a financial advisor or whatever. The learning and understanding experience and the execution, the investing experience all sits side by side on the Shyft platform for investors. So, I can only see that this can be supportive of growth across many different metrics in the future.