SA’s First ETF is 24 Years Outdated, Joyful Birthday Satrix 40

Twenty-four years in the past in the present day the primary ETF was listed on the JSE, The Satrix 40 (JSE code: STX40*) at a value of 774c.

The IPO course of was big and as I recall a pair billion Rands was utilized for with nearly 4million buying and selling on the primary day. I hadn’t heard of ETFs earlier than however a buddy satisfied me that they had been nice and I utilized within the IPO and nonetheless maintain having by no means offered any of my Satrix 40 ETFs,

At a present value of simply 7700c your preliminary funding is sort of 10x increased. However right here’s the actually wild reality, you’ve acquired simply over 2450c in dividends giving a complete worth for a purchaser on that first day of R101.50 in worth for that preliminary 774c buy.

That is an annualised return of 11.3%. By comparability the S&P500 has returned slightly below 8% annualised over the identical interval.

Returns in each examples would in fact be even increased assuming you reinvested the dividends acquired fairly then spend them.

The important thing level is that the launch of this ETF launched the idea of passive investing to South Africans which has not solely supplied nice returns, but additionally low charges. The low ETF charges have additionally seen different CIS devices akin to unit belief markedly decrease their charges, saving all people a bunch.

Satrix 40 | Prime 10 holdings | 30 September 2024

Simon Brown

* I maintain ungeared positions.

At Simply One Lap, we’re huge followers of passive funding utilizing ETFs. On this weekly weblog, we focus on ETFs on the native market and the components you want to take into account when selecting an ETF. When you’ve got questioned how one ETF differs from one other, that is the place you will discover out. We clarify which index every ETF tracks, what kind of portfolio may benefit from holding every ETF, and the way the prices will have an effect on your backside line.