Finweek - English

The outlook for SA’s four popular investment instruments

EXCHANGE-TRADED FUNDS

Surge in offshore as ETFs come of age

Exchange-traded funds (ETFs) remain the cornerstone of most investors’ portfolios – and 2020 saw the offering of offshore ETFs growing. Several new ones, including global bonds, China and two environmental, social and governance (ESG) ETFs came to the market. The key point here is the ease of investing in offshore ETFs, and specifically offshore technology ETFs, which enabled local investors to benefit from the surge in technological stocks. These tech-ladened ETFs saw returns of around 50% for the year, while vanilla global and US-focused ETFs returned around 20% for the year. This beat the local top-40-focused ETFs, which only managed a much more modest single-digit return. This is not bad considering the pandemic, but well behind the global ETFs. (Suffice to say that the Satrix Top 40* celebrated

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