Inflation+ ETFs from EasyETFs
EasyETFs listed three new Actively Managed ETFs (AMETFs) on the JSE yesterday, each targeting an inflation-beating return:
The numbers do exactly what they say. EASY3 aims for a return of CPI+ 3% over rolling three-year periods, with a low-risk capital-preservation tilt. EASY5 targets CPI+ 5% over rolling five years with a moderate, balanced profile. EASY7 reaches for CPI+ 7% over rolling seven years with a higher-equity, growth-oriented mix.
All three are Regulation 28 compliant, diversified across local and offshore equities, bonds, property and cash, and eligible for inclusion in a tax-free account.
For me, the appeal of a CPI+ structure is obvious. CPI+ is the language we actually think in when we save. We do not really care that the JSE Top 40 did 14% last year – we care whether our money grew faster than the cost of bread, electricity and school fees. A fund that promises to beat inflation by a fixed margin is selling you the thing you actually want.
But do CPI+ funds actually deliver?
What the long-term numbers show
The honest answer is that it depends entirely on which rolling window you measure.
Over the past 20 years, the ASISA SA Multi-Asset High Equity category – the closest analogue to a CPI+ 5 or CPI+ 7 fund – returned an annualised 11.6% against average CPI of 5.5%. That works out to CPI + 6.1% over two decades, comfortably ahead of a CPI + 5 target and just short of CPI + 7. The SA Multi-Asset Low Equity category returned 8.6% over the same period, or roughly CPI+ 3.1% – bang in line with a CPI + 3 mandate.
Twenty years of data looks great. The problem is that nobody invests for 20 years while never checking the statement. And over the last rolling decade, the average balanced fund in South Africa has delivered closer to CPI+ 2%, well short of what the labels promised. A CPI+ 5 fund that lands at CPI+ 2 is not a disaster – you still beat inflation – but you did not beat it by the margin you signed up for.
Why the target is hard to track
CPI is a moving target. With SA inflation now at 4.0% (April 2026), a CPI+ 7 mandate is asking for roughly 11% nominal returns – which on a Reg 28-constrained, multi-asset portfolio is proper work. Push CPI up to 6% and the same fund suddenly needs 13% nominal. The target moves underneath you and the asset allocation has to keep up.
Now sure, the rolling-window framing helps. Three, five and seven years gives the manager enough room to ride out the bad quarters and avoid being judged on a single drawdown. But the same framing means one rough stretch – the 2020 lockdowns, a local political wobble, an offshore correction – sits inside the measurement window for years. A fund that misses today is often paying for a quarter that happened three years ago.
Further, what if we wait seven years and get say CPI+ 4%. Now what? I’d imagibe we’d be much more active wanting to be on target within a year or two at worst.
Where this leaves the three new EasyETFs
I like the structure. A Reg 28-compliant, diversified, listed, tax-free eligible CPI+ fund is a useful building block – particularly for the saver who wants a single ticker to do the work of a balanced fund without paying a unit trust platform fee on top.
EASY3 looks most useful for someone within a few years of needing the money. EASY7 makes more sense for a tax-free you can leave alone for a decade or more. EASY5 sits in the middle for a saver who wants growth but cannot quite stomach a full-equity ride.
The risks are honest ones. The fund has to actually hit its target net of fees. The rolling window will look ugly at certain points regardless of how good the manager is. And the inflation environment matters more than the marketing copy admits – a low-CPI world makes the headline target easier to clear in nominal terms but does nothing for your real wealth.
EasyRetire gives us data?
Here’s where it gets interesting. These funds exist already within their retirement suite of funds so we have data. Short version, they have five years of data and are all ahead of the CPI+ targets. This is important and gives confidence to new investors. Of course five years does not cover any major market crisis (pandemic is now over 6 years ago).
How to judge a CPI+ fund
Firstly, judge a CPI+ fund on its rolling period, not on a single calendar year – that is what the mandate is built for. Secondly, always strip out the TER (no TER details as yet, but a management fee of 0.65%) and platform costs before celebrating the headline real return. Thirdly, ask whether the mandate actually matches the time horizon of your savings – a CPI+ 7 fund needs at least seven years before its target is even in scope, and buying one for money you need in 18 months is asking for a bad outcome.
Worth a watch, make sure you fit the right product to your actual needs.
ETF blog
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.
