South Africa’s 26-year-old hidden investment giant with R320 billion under management

While many South Africans may know the Satrix Top 40 exchange-traded fund (ETF), the company behind it and many other popular ETFs has largely flown under the radar.

Founded in 2000 as a joint venture, Satrix is the hidden asset management powerhouse behind many of South Africa’s most popular ETFs and other investment products.

ETFs are pooled investment vehicles that hold a basket of assets, ranging from stocks, bonds, or commodities, and trade on a stock exchange just like a normal company stock.

These investment vehicles have seen a boom in popularity over the past decade, thanks to their built-in diversification, trading flexibility, and lower fees compared to many other investment products.

ETFs have formed the foundation of Satrix’s incredible growth over the past two decades, starting with its oldest and most popular products – the Satrix Top 40.

Launched in 2000, the same year Satrix was founded, South Africa’s first ETF, the Satrix Top 40 ETF, was listed on the JSE in November 2000 with an initial public offering of R2.6 billion.

Satrix started as a joint venture between the JSE, Gensec Bank, and Corpcapital.

The idea behind Satrix’s launch was to democratise the market and move away from the view that investing was an activity exclusively for the wealthy and institutional investors.

ETFs played a key role in this “democratisation”, opening the local investment market to novice investors by offering lower fees and a lower entry point.

By 2002, two more Satrix ETFs had been launched, the FINI and INDI ETFs, marking South Africa’s first sector-specific ETFs.

According to Satrix, these funds gave investors direct access to the local financial and industrial sectors, enabling greater variety, diversification, and tactical asset allocation.

As the years went by, Satrix and its ETFs continued to grow in popularity, with the investment company officially registering as a Collective Investment Scheme in Securities in 2004.

This registration allowed Satrix to launch new products, including retirement and pension fund vehicles.

By 2010, a year after it became jointly owned by Deutsche Bank and Sanlam in a 50/50 partnership, Satrix’s AUM had reached R10 billion.

This growth was largely driven by the growing popularity of ETFs among retail investors.

Bigger and bigger

In 2011, Satrix launched its first unit trusts, which broadened its appeal even further by giving investors more ways to access low-cost diversified investments.

Similar to ETFs, unit trusts are a collective investment scheme where an investor’s money is pooled together with other investors’ money.

However, while ETFs trade on a stock exchange like regular shares, unit trusts are bought directly from a management company.

Therefore, unit trusts normally have higher management fees than ETFs and can be either actively or passively managed.

Satrix’s unit trust offering would only grow in 2012, as Sanlam acquired full ownership of the company, which saw Satrix absorb six Sanlam Investment Management (SIM) unit trusts.

This move also saw Satrix expanding into additional asset classes, launching its first global product, the Satrix MSCI World Equity Index, and its first multi-asset unit trust, the Satrix Balanced Index Feeder Fund, in 2013.

In that same year, Sanlam consolidated its Investment Management index funds under the Satrix brand, marking a major step toward expanding the company’s product line and reach.

In 2014, Satrix launched its Low Equity Balanced Index Fund, a Regulation 28-compliant, multi-asset fund suitable for retirement investment.

This allowed the company to attract investors seeking a lower-cost retirement investment vehicle, further broadening Satrix’s appeal among investors.

A year later, another development boosted Satrix and ETFs’ appeal – the National Treasury introduced the Tax-Free Savings Account (TFSA).

The Treasury introduced this product, which allowed South Africans to invest a certain amount completely tax-free, to encourage saving and investing.

That same year, Satrix teamed up with Easy Equities, one of South Africa’s biggest investment platforms, to launch SatrixNOW, the company’s own digital investment platform.

This platform gave investors easy access to the full range of Satrix’s ETFs and unit trusts, as well as tax-free investments and retirement annuities.

As the years progressed, Satrix’s popularity continued to grow, reaching R50 billion in AUM in 2016.

The company has spent the past decade broadening its product range with the launch of more ETFs, including an S&P 500 feeder ETF, and, more recently, the listing of its first Actively Managed ETF.

In 2019, it also expanded its geographic presence by dual-listing the MSCI World, MSCI Emerging Markets, S&P 500, and Nasdaq 100 ETFs on the Namibian Stock Exchange.

Today, Satrix boasts over R320 billion in AUM, and its flagship Top 40 ETF remains the most popular in South Africa, with a market cap of R21.38 billion.

Over its 26-year history, Satrix’s strong performance has been recognised by top institutions and awards.

In March 2021, it became the first index-tracking issuer to win an industry-coveted Morningstar Award for Best Fund House: Larger Fund Range category.

Satrix also won ten awards at the SALTAs in 2024, including the People’s Choice Award for both local and foreign Exchange-Traded Product categories.