Sygnia S&P 500 ETF versus Satrix S&P 500 ETF

An analysis by Daily Investor shows that the Satrix S&P 500 ETF delivered better results than the Sygnia Itrix S&P 500 ETF.

Satrix and Sygnia are South African fund managers that specialise in passively managed, index-tracking exchange-traded funds (ETFs).

Satrix is the largest local ETF provider with a market capitalisation of R38 billion, while Sygnia ranks second with R33 billion.

Both fund managers offer an ETF which tracks the S&P 500 – a stock market index tracking the performance of 500 large companies listed on US stock exchanges.

• Satrix S&P 500 ETF
• Sygnia Itrix S&P 500 ETF

These ETFs have the same mandate of tracking the performance of the S&P 500. However, there are subtle differences in management fees and tracking accuracy.

The Satrix S&P 500 ETF has a total expense ratio (TER) of 0.25%, while the Sygnia Itrix S&P 500 ETF has a TER of 0.20%.

Intuitively it looks like the Sygnia ETF should outperform the Satrix ETF because of its lower fees, but it is not the case.

Daily Investor tracked the performance of a R100 investment in each of these funds from 2017, which revealed that the Satrix S&P 500 ETF produced higher returns.

The R100 investment in the Satrix S&P 500 ETF grew to R198 over five years – higher than the Sygnia Itrix S&P 500 ETF’s R185.

The annualised return for the 5-year investment period was 13.85% for the Satrix Investment and 12.41% for the Sygnia investment.

Satrix’s better performance is likely a result of the different tracking and rebalancing strategies between the two ETFs.