SA ETF fees remain elevated relative to our global peers

--:--
There are clear trends abroad, especially in the US where firms like Blackrock and Vanguard have built up industry-leading pools of assets under management by being first movers in a range of passive investment products and exchange traded funds (ETFs), including actively managed ETFs.

The local asset management industry looks very different with larger active managers still holding significant market share and passive incumbents seemingly struggling to gain any significant portion of that share. The result is that, while the trend is moving in the right direction, fees in South Africa remain elevated relative to our global peers.

This was one of the key takeaways from recent Morningstar South Africa research in a review of retail share class fees across different unit trust categories according to the Association of Savings and Investment SA (Asisa).

The good news is that South African investors saw fund management fees declining last year. The average asset-weighted total expense ratio (TER) for active funds was 1.17%, while the same fee on passive funds was 0.57%. That being said, the costs are still substantially higher than tracker options in other markets.

But what does this mean for current and future investment prospects? Listen to our conversation with Sean Neethling (pictured above), head of investments at Morningstar South Africa, on some of the significant developments in the passive and active asset manager universe.
27 Sep 2024 English South Africa Investing

Other recent episodes

How to Trump-proof your portfolio

In this episode of Money, Markets, and Masterminds, Citywire South Africa sits down with Chantelle Baptiste, portfolio manager and head of equity research at Fairtree, to discuss the biggest financial trends shaping 2025. With market swings following every Trump statement, growing policy uncertainty, and South Africa’s own economic challenges, how…
18 Mar 18 min

How taxes are killing South Africa’s economy

With value-added tax (VAT) hikes, rising income tax burdens, and thousands of non-compliant taxpayers, has South Africa’s economy reached its tax tipping point? In this episode of Money, Markets, and Masterminds, Citywire South Africa and Keith Engel, CEO of the South African Institute of Taxation, break down the true impact…
14 Mar 23 min

Podcast: How Trump fails economics 101

In this episode of Money, Markets and Masterminds, Citywire South Africa is joined by economist Professor Adrian Saville for the second instalment of the bi-monthly chapter of ‘The Long Game’. We break down economic principles, challenge political rhetoric and assess US President Donald Trump’s economic policies against real-world data. From…
13 Mar 20 min

The Deep Seek effect - a game-changer for global markets?

In this episode of Money, Markets and Masterminds, we dive into the ‘Deep Seek effect’ and how this Chinese AI start-up is shaking up investor sentiment and challenging long-held market narratives. With geopolitical uncertainty, shifting global equity trends and the dominance of US tech under scrutiny, Sean Neethling, head of…
7 Mar 21 min

Are US equities in bubble territory?

The US equity market has been a dominant force in global investing for decades, but is it now too concentrated – and too expensive? In the latest episode of Money, Markets and Masterminds, Citywire South Africa sits down with Anton Eser (pictured below), CIO at 10X Investments, to discuss the…
24 Feb 20 min