Our favourite ETFs

April 17, 2024

A look at our favourite passive investment options


What is an ETF?

An ETF is a bundle of assets that are pooled together as one. For example, the S&P500 represents the top500 stocks in the US. Instead of investing R100 into a single stock, your R100 is divided into fractions containing all 500 of these companies.   

ETFs offer investors the opportunity to generate strong, stable returns whilst mitigating the risk of managing individual shares. The only challenge is finding an ETF that tracks an index that suits you. 


Individual shares vs ETFs

Active investing requires a hands-on approach, typically buying and selling individual shares. Active investing requires knowledge and confidence that the investor will know what to buy and when to sell.

The goal of an active manager is to beat the markets average returns. For example, instead of investing in the S&P500 ETF (which yields roughly 10% year-on-year returns), you pick your own batch of shares and see if you can beat the 10% average on a consistent basis over the long term.

Passive investing involves less buying and selling and often results in investors buying index funds or ETFs. Passive investors generally employ the "buy and hold" strategy and invest for the long-term. Finally, passive investors try to limit how often they sell shares, which makes this strategy a very cost-effective way to go about investing.


Which strategy is best?

The boring, yet true answer, is that it is each to his own. It depends on your personal conviction, knowledge level, risk profile, financial situation etc. 

Historically, passive investing has outperformed active investing. Sure, there are the Warren Buffetts out there who can consistently outperform the market (and sometimes by quite a big margin). But for the average Joe, it is often best to stick with collective investment schemes, like ETFs and unit trusts. Its all about risk vs reward.

For beginners, we suggest investing mostly in ETFs. Once you are familiar with investing and learn more about individual stocks, you can start dipping your toes in the water. To get the latest stock picks, follow the FinMeUp app.


Favourites by asset class

  • SA shares: Top40
  • US shares: Nasdaq100/ S&P500
  • Global shares: Global1200
  • Fixed income/Bonds: SA Bond ETF
  • Crypto: EC10


Favourites by themes

  • Dividend-yielding: Satrix Divi Plus 
  • Emerging Markets: MSCI Emerging Markets 
  • China exposure: MSCI China
  • Batteries & renewable energy: Global X Lithium & Battery ETF (LIT)
  • Retirement Annuity: Allan Gray/ Coronation balanced fund

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