South Africa’s exchange traded investment industry has continued its remarkable expansion. Assets rose to R320.7bn at the end of September, as intensifying competition between asset managers and the rapid arrival of actively managed exchange traded funds (ETFs) reshape one of the fastest-growing segments of the local financial industry.
The latest quarterly report from ETF specialist Mike Brown’s etfSA shows the industry’s assets increased 8.7% during the first nine months of 2026, with R14.9bn in net new capital flowing into exchange traded products (ETPs). The balance of the R25.7bn increase came from changes in the market value of the underlying investments.
The figures confirm a striking growth trajectory. As recently as the end of 2022, the local industry held R129.3bn. By the end of 2024, that had increased to R225.4bn, rising to R295bn at the end of last year.
“The steady and consistent growth of the SA ETP industry, since 2022, remains intact,” Brown says in the report.
Perhaps more significant than the increase in assets, however, is the growing diversity of investment products and providers. The number of ETPs listed on the JSE has risen from 291 at the end of last year to 320 in September, with much of the growth coming from actively managed ETFs, a relatively new product category in South Africa.
There are now 54 actively managed ETFs, compared with 37 at the beginning of the year and just six at the end of 2023. Together, they hold R25.8bn in assets and attracted R5bn in net new capital during the first nine months of this year.
Traditional ETFs, which generally track an index such as the JSE Top 40 or the S&P 500, still dominate the industry, accounting for R246.9bn or 77% of total ETP assets. The balance comprises actively managed certificates and exchange-traded notes, different types of financial instruments often issued by banks.
But the rapid proliferation of actively managed funds represents an important shift in the industry’s competitive landscape.
Until recently, ETFs were primarily associated with passive investment strategies in which investors could acquire a diversified portfolio of shares without paying a fund manager to select individual stocks. Actively managed ETFs turn that idea on its head by allowing fund managers to apply their own investment strategies within an exchange-traded structure.
The JSE changed its listing requirements in October 2022 to accommodate these products and the first actively managed ETF, launched by what is now 10X Investments, listed in May 2023.
The change has opened the market to a much wider collection of fund managers, including smaller investment houses that might previously have found the regulatory and administrative costs of establishing listed investment products prohibitive.
Platforms operated by Prescient, EasyETFs and others now enable independent managers to list their portfolios without establishing their own ETF management companies. According to Brown, more than 50 individual asset managers are using such arrangements.
Prescient has become the leading platform for actively managed ETFs, with 25 products holding about R11.1bn. Among the successful fund launches and capital raisings are Adviceworx Worldwide Equity, which attracted R1.28bn during the first nine months, and the Prescient Income Provider Fund, which attracted R711m.
EasyETFs has also been particularly active and added nine products this year, including funds managed by Anchor, Cartesian and Benguela. Its 12 listed actively managed ETFs now hold R2.9bn. Other participants include 27four, RealFin, Allan Gray and Arysteq, while established investment managers such as Ninety One also participate through third-party platforms.
The result is a curious combination of increasing competition and continuing concentration.
Satrix, the Sanlam-owned investment manager that pioneered ETFs in South Africa, remains overwhelmingly dominant with R114.8bn in listed ETP assets, equivalent to almost 36% of the industry.
Its closest competitor, Sygnia Itrix, manages R49.4bn, followed by Absa with R44.1bn, UBS with R27.4bn and FNB with R20.8bn. 10X is close behind with R20.7bn.
More revealingly, Satrix attracted R14.17bn in net new capital during the first nine months, equivalent to almost the entire industry’s net inflows. Its success was partly offset by redemptions at competing providers including R6.2bn at 1nvest, R2.2bn from Absa’s NewGold business and R1.4bn at Sygnia Itrix.
Satrix’s most successful products included its MSCI Emerging Markets ETF, which attracted R2.78bn, the Satrix 40 with R2.46bn, and the MSCI World ETF with R2.02bn. The figures suggest that South African investors are continuing to seek greater international diversification, though demand for domestic equity exposure remains substantial.
The success of Satrix reflects a long history. Its flagship Satrix 40 was the first ETF and listed on the JSE in November 2000, following an initial offering that raised R2.65bn. At the time, the notion of buying a single share that effectively gave an investor exposure to 40 leading companies was a considerable innovation.
Sygnia took a different route. In 2017, under Magda Wierzycka, it acquired Deutsche Bank’s South African db X-tracker business for R325m, gaining five established international ETFs and about R12bn in assets. The acquisition gave Sygnia an immediate foothold in offshore index investing, which subsequently became one of the industry’s most popular categories.
The two companies now control just more than half of South Africa’s entire ETP market, though their combined share of conventional ETFs is substantially higher.
The local expansion is part of a much larger international transformation.
According to global ETF research firm ETFGI, assets invested in ETFs internationally reached $23.91-trillion at the end of September, an increase of 20.7% since the beginning of the year. Net inflows reached a record $2.24-trillion in the first nine months, and the industry has now recorded 88 consecutive months of positive net investment flows.
Actively managed ETFs have been an especially powerful source of growth internationally, attracting $734bn in net new investment during the first nine months of 2026, compared with $447bn over the equivalent period last year.
The underlying drivers include investors’ growing sensitivity to management fees, the convenience of exchange trading and digital investment platforms and, particularly in the US, tax advantages that favour ETFs over conventional mutual funds.
There is an interesting paradox in the growth of actively managed ETFs. The original ETF revolution was largely about reducing the need to pay investment managers to select shares. Now those very managers are embracing the structure.
For investors, the difference between an actively managed ETF and a conventional unit trust can be surprisingly small. Both can hold exactly the same underlying investments and employ precisely the same investment strategy. The principal distinction is that an ETF trades on a stock exchange throughout the day, whereas a conventional unit trust is normally bought or redeemed at a price calculated once daily.
ETFs can provide greater trading flexibility and sometimes lower costs, but actively managed ETFs are not necessarily cheaper than conventional unit trusts, particularly once brokerage charges and trading spreads are included.
Great benefits for fund managers
For fund managers, however, the advantages can be considerable. ETFs offer an additional distribution channel, providing access to stockbroking clients, digital investment platforms and investors who might not otherwise purchase conventional unit trusts.
That raises an important question about the extent to which ETF growth represents genuinely new savings, or simply money migrating from one investment structure to another.
South Africa’s conventional collective investment industry remains vastly larger, with R4.6-trillion under management at the end of June, according to the Association for Savings and Investment South Africa. That figure includes funds structured as ETFs, but nevertheless illustrates the scale of the traditional investment management business.
And while the growing number of ETF products indicates considerable enthusiasm among managers, it does not necessarily imply that investors are equally enthusiastic about every new offering. Actively managed ETFs already account for about 17% of listed ETP products in South Africa, but only about 8% of the industry’s assets.
The next phase of competition will therefore be about attracting sufficient money to these funds, rather than simply launching more of them.
The development is nevertheless encouraging for the JSE, which has struggled for years with declining numbers of ordinary company listings. The exchange is finding it difficult to attract businesses seeking to raise capital, but is much more successful in attracting financial institutions that offer new ways to invest.
Whether that ultimately produces better returns or lower fees for investors remains to be seen. But one thing is becoming increasingly clear: the ETF is no longer simply an inexpensive alternative to a conventional fund manager. It is rapidly becoming one of the principal ways fund managers compete for customers.
