Home Business South Africa: Easy Ways for Average Investor Newbies to Get a Toehold in the Stock Market

South Africa: Easy Ways for Average Investor Newbies to Get a Toehold in the Stock Market

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Investing in the stock market or equities can be daunting, but relatively simple investment vehicles, such as unit trust funds and exchange-traded funds (ETFs), mean that it is easily accessible to the average investor. Here’s what you need to know.

First published in the Daily Maverick 168 weekly newspaper.

Kingsley Williams, chief investment officer at Satrix, says the key difference between the two is that an ETF is accessed through an exchange such as the JSE, while a unit trust is accessed through the management company that issues the unit trust, such as Allan Gray or Coronation.

November 2020 marked the 20th anniversary since South Africa’s first ETF was introduced by Satrix. According to etfSA, a financial services provider, there were only five new ETFs issued in 2020. The five new ETFs all tracked foreign assets and were issued by Satrix.

The convenience of an ETF lies in being able to increase your exposure to different underlying assets by, for example, investing in the Satrix Top 40 ETF, which gives you exposure to the top 40 stocks listed on the JSE in a single investment.

Iva Madjarova, head of investment consulting at Sygnia, notes that ETFs are available across every…

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