10X Investments leading the exchange traded fund wave in South Africa

Tobie van Heerden

10X Investments, one of South Africa’s fastest-growing investment companies, has gained significant traction among specifically retail investors (either direct or via intermediaries).

According to data from the Association for Savings and Investment South Africa (ASISA), the company earned 27% of the overall net flows in the index-linked fund market in the last year.

Exchange Traded Funds (ETFs) are fast becoming a fundamental component of a diversified share portfolio amid 16-year high interest rates in the US and evolving market conditions. Globally, index funds and ETFs account for over a quarter of inflows, and in the US, more than half of inflows are from these products.

“Investors are increasingly turning to cost-effective, transparent investment options that expose them to a range of assets,” says 10X Investments CEO Tobie van Heerden. Adding that, “just three years ago index-driven funds made up 6% of market inflows in South Africa and now we’re at 10% and we predict that we could reach 20% within the next five years.”

According to the JSE, the market capitalisation of listed ETFs has increased from R68bn in 2019 to R167bn in 2024, a staggering growth of 147%.

10X Investments’ total growth has garnered substantial market attention thanks to consistently growing assets under management (AUM) and its user-friendly platform. ASISA data from the second quarter of 2024 revealed that more than 55% of the net flows into the country’s market-tracking funds had been allocated to 10X Investments and its competitor Satrix.

Long-term investment growth

10X Investment’s flows have shown consistency for every quarter since Q3 2023 – ranging between R1,5bn to R1,9bn net positive – showing a consistent growth trend. Being the incumbent index-driven ETF provider, Satrix received 28% of these flows, ranging from -R58 million to R3,6bn over the same period.

It is noted that all other firms lost market share with Sygnia notably among those only attracting just over 1% of the total market-linked flows according to ASISA figures.

10X Investments’ success highlights a shift towards digital and cost-efficient investing in South Africa, as investors increasingly prioritise convenience, transparency, and low fees. The ETF product’s design – which allows for lower management fees and broad market exposure – has positioned the company as a prominent player in South Africa’s evolving investment landscape.

“The market condition suggests that South Africa is beginning to follow global investing trends. The country is on a path towards having 20% to 25% of industry AUM held within systematic ETFs and Mutual Funds,” says van Heerden.

Global trends also indicate that the index-driven investment market is one where the leaders make the market. Having achieved consistent growth in recent quarters, 10X Investments aims to further expand its offerings, providing more options that reflect investor demand for high-performing, low-cost products. Helping its clients grow their wealth through innovative investment services.