We invite you to follow Helena’s “Satrix shares…” series on BizNews. We share the first of those letters here.
Satrix shares... the long history of ETFs in South Africa
I spend a lot of time reading the financial press. This allows me to understand the landscape better and deliver what our investors want. Recently I’ve been noticing that Satrix investors are getting younger and younger, which makes me extremely happy because everyone needs to take their money seriously and the earlier the better! But what I’ve also realised is that some of them are too young to know the story of ETFs in South Africa and especially the unique story of Satrix – the architect of ETFs in SA.
Despite our shortcomings politically and economically, South Africa’s financial services sector has always been progressive, offering investors world class investment opportunities and access. One of the best examples of this is our robust and mature ETF market, which to date offers 71 ETFs across all asset classes both locally and globally.
Satrix, the South African ETF pioneer, caused a shake-up in the South African investment space when introducing the country to ETFs in 2000 by launching the first ETF listed on the JSE. The Satrix TOP 40 ETF needs no introduction and serves as the go-to broad market exposure investment option for professional and amateur investors alike. In fact, the Satrix product set and access options have been so transformative to the South African investing landscape that people tend to refer broadly (but erroneously) to all index trackers as Satrix.
Since that first South African launch we have listed eight more ETFs, bringing the total number of available Satrix ETFs to nine. In fact, our most recent listings were in February this year when we added a property ETF and an inflation-linked bond ETF to our range. You can now build a completely diversified portfolio of local asset classes using only low-cost Satrix ETFs.
But we soon realised that listing the first ETF wasn’t enough. Our investors needed a cost-effective way to access the ETF even if they couldn’t access the JSE in its entirety. This saw the launch of the (revolutionary at the time) Satrix Investment Plan in 2006. Trading on the JSE was an expensive and onerous endeavour for smaller investors as one needed to have large sums of money to qualify for a stockbroking account.
Our philosophy has always been to provide stock market access to as many people as possible. The Satrix Investment Plan did just that (albeit mostly in the non-online world). It gave anyone access to Satrix ETFs for as little as R300 per month - no more large minimum amounts. Investors flocked.
Being a pioneering and innovative team first to market with the latest ideas, we realised that we owed it to our clients to make investing ever easier and cheaper (and online). In 2015 we met up with the ground-breaking team at EasyEquities. It very quickly became apparent that the low-cost, no-minimum, online platform they had developed, which allowed fractional share trading, would be perfect for our clients too. It was easy for us to work with EasyEquities as they share our vision of democratising investing for all South Africans. In no time at all we had our very own www.SatrixNOW.co.za platform up and running, which allows you to do everything online with no annual fees and extremely low trading costs. Once again Satrix had listened to what the people wanted and pioneered a solution to make ETF access ever easier and cheaper. With SatrixNOW there really are no excuses as you can invest as little as R10 if that is all you have.
Those investors who have walked this 17-year long road with us have been handsomely rewarded for their trust, loyalty and patience. This is also why we keep improving the landscape for all investors and ETF providers in South Africa. It is our firm belief that everyone in our country should have access to the power of the stock market and we will soon be adding access to international markets to our ETF suite.
Over the next few weeks I will be sharing more Satrix stories with you and debunking myths in the index tracking space right here on BizNews.
As always and till next time, #JUSTSTART.
POSTED : 3 MAY 2017