State of the South African Exchange Traded Product (ETP) Industry – as at 29 December 2023

INDUSTRY OVERVIEW

The total market capitalisation of the ETP industry in South Africa, as at end-December 2023, amounted to R165,4 billion, an increase of 28% on the market capitalisation at the end of 2022.

This is a record figure for the index tracking Exchange Traded Products, listed on the JSE and the total increase of R36,1 billion during the course of last year, was the biggest realised since the first ETF was listed in South Africa in 2000.

Several features emerging during the course of the past year, that assisted in the sharp growth in the industry.

• Actively managed exchange listed products became readily available to investors. By the end of the year, 44 Actively Managed Certificates (AMCs) and 5 Actively Managed ETFs (AMETFs) were listed on the JSE.

• Demand for foreign referenced ETFs and ETNs increased significantly, as global equity markets recovered in the second half of last year and rand depreciation promoted rand hedge strategies.

• Higher interest rates, particularly in long-dated bonds, both globally and locally, boosted the use of ETFs offering portfolios tracking the major bond indices.

These trends are likely to continue in 2024.

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