Our Exchange Traded Fund (ETF) market on the JSE stands at some R125billion, which is in one sense a large number. For comparison that is a little larger than Absa, a giant banking group with hundreds of branches and almost 40,000 staff.
But then considering that Coronation ai just one active manager has assets under management of R633.8billion – it’s tiny. Further, compare this to the USA where the ETF market is reportedly US$6.6trillion against a total market value of some US$26.6trillion. That makes the passive market almost a quarter of the overall market.
Locally JSE listed stocks are valued a just under R20trillion so our ETF market is very small at less than 1% of the entire market value. That makes it sound absolutely tiny and it is.
Below is the top 5 ETFs with a corresponding sized listed share;
|Satrix40||R11.1billion||Tsogo Sun Gaming|
|Itrix USA||R6.9billion||Wilson Bayly Holmes|
|Satrix World||R6.5billion||African Rainbow Capital|
We do have a decent range of ETFs and without them what would we invest not our tax-free accounts? And considering that the corresponding companies above are well known and in most cases have been around since before the first ETF was listed in December 2000, we’re doing okay.
At Just One Lap, we are big fans of passive investment using ETFs. In this weekly blog, we discuss ETFs on the local market and the factors you need to consider when choosing an ETF. If you have wondered how one ETF differs from another, this is where you can find out. We explain which index each ETF tracks, what type of portfolio could benefit from holding each ETF, and how the costs will affect your bottom line.