Tag: Exchange-Traded Fund (ETF)

Could exchange traded funds be South Africa’s next big retirement trend? As people plan for retirement, exchange traded funds (ETFs) can be a smart choice. They are liquid, cost-effective, and an easy way to diversify your investment portfolio.

South Africans should understand that if they have substantial sums of money deposited in either a bank or investment account, they will inevitably be required to pay taxes on the income or capital growth derived from it.

When it comes to creating the financial future you want, investing in the stock market is a proven method that has been tried and tested by millions of investors over many years. Of course, for anyone starting out on their investment journey, the myriad options available, both locally and internationally, can be more than a little intimidating.

South African fuel prices increased again on 3 November and petrol price is now at 33.9% this year with the Automobile Association of South Africa (AA) warning that R20 per litre could still be on the cards for by year end. The main reason for the pressure on local fuel prices has been a sharp increase in the brent crude oil price over the past few months.

The Satrix Global Infrastructure Feeder ETF (STXIRF) began trading on JSE yesterday, offering investors an investment vehicle that gives them exposure to a diversified portfolio of the largest and most liquid infrastructure companies in developed and emerging markets.

In times of uncertainty, investors typically flock to safe haven assets, gold probably being one of the most known and talked about. This year alone has seen the price of gold soar nearly 19% as investors seek diversification from more traditional assets like stocks, bonds, or property.

Active and passive investing are simply different methods of gaining access to financial markets, and there are benefits and drawbacks to each. Our view is that one does not have to choose between active and passive, but that the two work very well together in an investor’s portfolio.

Investors’ appetite across the globe for exchange-traded funds (ETFs) was strong in 2019 and shows little sign of slowing. I share some of the themes and trends that I see ahead in 2020. The tailwind for ETFs going into not only a new year but a new decade couldn’t be stronger. Last year, global ETF assets under management (AUM) surpassed US$6 trillion, and in Europe we broke US$1 trillion in AUM.1 

With 2018 having been a particularly dismal year for local equities – the worst, in fact, since the 2008 financial crisis – South African investors are increasingly opting to build and manage their own direct equity portfolios in an attempt to take back control, cut out the middle man, and ultimately save money on fees.

An Exchange Traded Fund (ETF) is an investment fund, traded on stock exchanges, which are an attractive proposition due to their low costs. Terms such as passive investing, low cost investing or indexation investing are terms often used to describe this strategy. The purpose of incorporating ETFs or passive portfolios into one’s investment strategy is to manage costs over the long term.