State of the South African Exchange Traded Product (ETP) Industry – as at 31 March 2022

INDUSTRY OVERVIEW
The total market capitalisation of all ETFs and ETNs, listed on the JSE, at the end of March 2022, amounted to R130 479,9 million, a drop of R5 569 million, or 4,1%, on the market capitalisation of the ETF industry at the end of 2021.

The drop in the total value of the Exchange Traded Product industry in South Africa was due to the fall in prices of notably offshore ETFs and ETNs listed on the local stock exchange. Over the 3-month period to end-March 2022, the MSCI World index (in rands) fell by 13,4%, reflecting the global equity market decline, faced by unexpectedly high rises in inflation and the impact of the Russia/Ukraine War, both on economic growth and on the world inflation rates.

As the majority of the bigger ETPs listed on the JSE reference foreign assets, this has had a negative impact on the total market value of many ETPs over the past three months.

By contrast, the South African equity market has provided positive returns over the last 3 month period, helped by good corporate earnings and dividend growth by most major SA companies.

The fact that the SA ETP industry is skewed in favour of foreign rather than local markets, explains the decline in total market capitalisation of the industry over the last quarter.

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