Active investing attempts to outperform any given market or index in that market. In return for the promise of this premium performance, active investment managers and advisors charge fees over and above the usual investment costs. Undoubtedly, a few active managers do beat the market, and the impossible part is knowing which ones will.

Passive investing does not try to outperform a market or index. It promises only the performance of the market or index. Passive investing, such as index tracking are associated with lower costs.

Exchange Traded Funds (ETF) include index-tracking funds such as Satrix. An ETF is a listed security that replicates the composition of an index of a pre-selected basket of shares. An ETF will invest passively in the same way as a unit trust index fund does, reflecting only the shares represented in a pre-selected index. But where a unit trust only trades once a day, an ETF trades real time, it can be bought and sold as oridinary share are, whenever a stock exchange such as the JSE is open for business. And like ordinary shares, the price is available in a daily newspaper.

A few years ago, no one had heard of ETFs. Now there is a massive $535 billion invested in 450 Index ETFs globally. ETFs spread risk across a wide spread of blue chip shares. They track the performance of an entire market sector.

The benefits of listing ETF's:
Trading takes place all to take advantage of intra-day price movements
Settlement, clearing, registration, guarantee of trade takes place through normal market mechanisms.
Price transparency and open price discovery is ensured.
Markets and market makers provide good liquidity.
Daily NAV (Net Asset Values) and index baskets are published.
Open-ended funds i.e. creation and redemptions can take place at any time through physical exchange of baskets.
Physical swap of baskets for Satrix effectively ensures that Satrix own perfect baskets at all times.

There are seven Satrix ETFs. Each Satrix ETF allows you to own the performance of the JSE's blue chip companies with a single transaction.