By the close of 2024, global exchange-traded fund (ETF) assets under management (AUM) hit US$14.85-trillion, marking a 17.1% compound annual growth rate (CAGR) over the past decade. South Africa is aligning with this trajectory, witnessing mass inflows into ETFs and index-tracking investments. Satrix, the dominant player in the local ETF market, captured 72.5%* of all ETF flows in 2024, while its combined ETF and indexed unit trust flows accounted for 50.5%* of total indexation flows. According to Fikile Mbhokota, CEO of Satrix**, the group experienced 127% year-on-year ETF inflow growth from 2023 to 2024, adding nearly R5-billion in inflows and pushing Satrix’s AUM beyond R240-billion^ as of December 2024.
This exponential growth reflects a fundamental shift: investors are embracing ETFs as core portfolio holdings, attracted by cost efficiency, transparency and liquidity. The move toward indexation is accelerating – over the past 12 months, indexed strategies accounted for 87.8% of total industry net inflows. The structural shift away from actively managed funds highlights how local investors are recalibrating their portfolios to align with global trends.
Global ETF trends shaping 2025 and beyond
- Explosive growth in ETF savings plans. ETFs are becoming the default investment vehicle for long-term savings, particularly in Europe. ETF savings plans are projected to quadruple over the next five years, according to BlackRock. This retail-driven trend signals a growing demand for automated, cost-effective investing, which could spill over into emerging markets like South Africa.
- The rise of active ETFs. Active ETFs are outpacing traditional mutual funds, particularly in the United States, with a staggering
US$3-trillion flow gap in favour of ETFs. This shift suggests that investors are seeking the flexibility of active management combined with the efficiency of ETFs – a trend that could see local asset managers responding with more innovative product offerings. - Institutional acceleration in ETF adoption. ETFs are no longer just a retail investment tool – institutional investors are increasing their allocations to ETFs for their cost efficiency, liquidity and tactical portfolio management benefits. South African pension funds and asset managers are expected to follow global institutions in using ETFs for risk management, sector rotation and exposure to international markets.
- Thematic and alternative ETFs gaining traction. Global ETF innovation is at an all-time high, with 1 787 new product ETFs launched in 2024, a net increase of 1 234 after 553 closures. Cryptocurrency ETFs are experiencing robust asset accumulation, led by the iShares Bitcoin Trust.
- Regulatory tailwinds supporting ETF growth. Europe’s ETF market is benefiting from regulatory frameworks, boosting transparency and digitalisation.
Breaking new ground
ETF adoption in South Africa will continue accelerating, driven by both retail and institutional investors seeking cost-effective, globally diversified investment solutions,
– says Mbhokota.
She anticipates:
- Stronger inflows into equity and fixed-income ETFs
- A growing shift toward international diversification
- Increased demand for innovative, crypto and active ETFs
As South Africa’s financial ecosystem evolves, ETFs are becoming the backbone of modern portfolio construction, reinforcing their position as a core component of investor strategies in 2025 and beyond.
*Sources: Satrix and Morningstar, 31 December 2024 | ^Satrix, 31 December 2024, AUM represents all assets managed in CIS vehicles
(Satrix ETFs, unit trusts and UCITS), life pooled portfolios, assets managed via segregated mandates by Satrix as a division of Sanlam Investment Management and Satrix branded endowment funds managed by Sanlam Structured Solutions. **Satrix is a division of Sanlam Investment Management.
Other sources used:
- ETFGI
- Morningstar
- etfSA.co.za
- Introduction to ETFs: by State Street Global Advisers SPDR.
- Goldman Sachs ETF Accelerator: The Growth of ETFs in Europe.
Satrix Managers (RF) (Pty) Ltd (Satrix) is a registered and approved Manager in Collective Investment Schemes in Securities and an authorised financial services provider in terms of the FAIS. Collective investment schemes are generally medium- to long-term investments. With Unit Trusts and ETFs, the investor essentially owns a “proportionate share” (in proportion to the participatory interest held in the fund) of the underlying investments held by the fund. With Unit Trusts, the investor holds participatory units issued by the fund while in the case of an ETF, the participatory interest, while issued by the fund, comprises a listed security traded on the stock exchange. ETFs are index tracking funds, registered as a Collective Investment and can be traded by any stockbroker on the stock exchange or via Investment Plans and online trading platforms. ETFs may incur additional costs due to being listed on the JSE. Past performance is not necessarily a guide to future performance and the value of investments /units may go up or down. A schedule of fees and charges and maximum commissions are available on the Minimum Disclosure Document or upon request from the Manager. Collective investments are traded at ruling prices and can engage in borrowing and scrip lending. Should the respective portfolio engage in scrip lending, the utility percentage and related counter parties can be viewed on the ETF Minimum Disclosure Document. International investments or investments in foreign securities could be accompanied by additional risks such as potential constraints on liquidity and repatriation of funds, macroeconomic risk, political risk, foreign exchange risk, tax risk, settlement risk as well as potential limitations on the availability of market information. For more information, visit www.satrix.co.za.
