South Africa’s exchange traded fund (ETF) industry is experiencing a purple patch, with instruments listed on the JSE fast approaching the R250bn market — a phenomenal growth since the first ETF was listed in South Africa in 2000.
Today, there are about 126 funds listed on the local bourse. The JSE recently welcomed the listing of the new Satrix Global Property Feeder ETF, which provides investors with access to global real estate markets through a locally listed instrument.
Maurice Madiba, head of primary markets at the JSE, said the listing offers investors the ability to diversify across geographies, sectors and currencies within a single, locally listed product.
“It reflects the increasing demand for innovative investment solutions that combine simplicity, liquidity and efficiency,” he said.
“The listing of the Satrix Global Property Feeder ETF marks a significant step in expanding access to global real estate markets through a locally listed instrument, while offering diversification across geographies, sectors and currencies for investors.”
The biggest participants in the industry are Satrix, Sygnia and Absa. Satrix alone has R52.3bn worth of ETFs under management.
Despite selling most of its ETFs to Satrix as part of the sale of Absa Asset Management to Sanlam, Absa still holds the No 3 spot in the industry.
Lauren Jacobs, senior portfolio manager at Satrix, said the listing of the global property feeder ETF was a demonstration that ETFs continue to gain popularity as they offer key advantages such as trading flexibility, liquidity, portfolio diversification and transparency — all within a cost-effective structure.
“This new fund expands our ETF offering by providing investors with exposure to global real estate companies in a number of developed markets which can be used to diversify their offshore exposure,” Jacobs said. “While designed for those with a longer-term investment horizon, it can also be blended with other funds to create a portfolio aligned to individual risk profiles.”
Satrix made a foray to East Africa with the listing of one of its funds on the Nairobi Securities Exchange. The move gives the company, which has the largest market share in the ETF industry in South Africa at nearly 30%, exposure to Kenya, East Africa’s economic powerhouse.
The Sanlam-owned firm has amassed more than R200bn in assets under management invested in a range of ETFs, index-tracking unit trusts, life pooled and segregated portfolios that are tailored for client-specific mandates or retail funds.
It has ambitions to be a pan-African player. To this end, the company on Wednesday completed the secondary listing of its MSCI World Feeder ETF, which has been listed on the JSE for eight years.
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