ETFs suck in money: What they are, how to choose – investment expert

South Africa's Exchange Traded Funds (ETFs) are mushrooming as investors snap up exposure to global market indices and assets like gold for as little as R125/month. In 2000, the first EFT was launched. There are now about 105 ETFs and ETNs, issued by about a dozen companies, with more than R90bn invested in these funds. It is the biggest product of its type outside unit trust funds, and is bigger than the private equity and hedge fund sectors. The market capitalisation of the ETF sector jumped by about 20% over the past year. In this interview with BizNews Radio, ETF entrepreneur Mike Brown of etfSA.co.za explains why ETFs are hotting up as an investment option. He picks up on the types of ETFs that are becoming popular, those that are producing tantalising returns for investors and explains how smart beta funds – the sexy new investment option in passive investing internationally – work. If you are looking for investment ideas and want to narrow your choice between more than 100 ETFs available in South Africa, this podcast should be your first stop on the journey to identify an investment vehicle. – Jackie Cameron

By Jackie Cameron

The Exchange Traded Fund (ETF) sector is one of South Africa's business success stories. At the end-June 2019, the total market capitalisation of all the listed Exchange Traded Products in South Africa amounted to R91,3bn, reports etfSA.co.za. "This implies a substantial increase from the total market capitalisation of R77.8bn at the end of 2018, a rise of 17.4%," says the independent operator, in a report on the state of the ETF industry.

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