Johannesburg, 17 December 2020: 2020 has been a difficult year for many and has highlighted the importance of having savings to be able to fall back on, or dip into when times are tough – they are also an essential way to build wealth to secure the future you want for you and your family.
With the festive season in full swing, now is the perfect time to consider a gift that has the benefit of longevity, an investment on the Johannesburg Stock Exchange (JSE) through an Exchange Traded Fund (ETF). ETFs offer a great opportunity to start a saving and nurture an investment culture that could potentially last a lifetime.
An ETF is a listed investment product that tracks the performance of a "basket" of Shares, Bonds or a single commodity. These "baskets" are known as indices. An ETF can be bought or sold in the same way as an ordinary Share and are ideal for any investor wishing to gain exposure to different sectors and asset classes, both locally and globally.
ETFs offer convenience and flexibility allowing investors to make monthly contributions or a once-off lump sum, depending on the investor’s needs. Some ETF platforms even allow for no minimum investable amounts. An ETF investment can serve as a unique Christmas gift thereby offering investors exposure to some of the biggest companies, distinctive brands and best performing assets whether situated locally and internationally. Investors may now invest in Share baskets comprising of international stocks such as Facebook, Amazon, Apple, and Netflix; or local companies from the resource, industrial or financial sectors or even bonds or commodities such as gold, platinum, and palladium. Like any investment guided by market forces, when these various assets do well, your ETF investment does well, while the inverse is also true.
Adèle Hattingh, Business Development and Exchange Traded Products Manager at the JSE says, “The idea of investing is intimidating for most people, which is why ETFs are an effective way of starting their investment journey. ETFs offer you many preselected investments in one of many cost effective, transparent listed funds, saving you time and money.”
The festive season is often a time when money is spent more frivolously than the rest of the year. However, with just a slight change in behaviour and in spending habits, it is possible to benefit from long-term growth by investing rather than spending.
The JSE offers a range of 78 ETFs on the exchange – offering exposure to local and international assets, some of which are traditionally difficult to gain access to. Another added benefit of ETFs, particularly collective investment scheme (CIS) ETFs, is the ability to use a Tax-Free Savings Account (TFSA) where TFSA compliant ETFs can reap investment returns free of dividend tax, interest income tax and Capital Gains Tax (CGT). Therefore, any profits made belong solely to the investor and not the Receiver of Revenue.
This year, the JSE celebrated 20 years of ETFs listing on the exchange showcasing their longevity, growth, and evolution of the industry. The ETF market has become an integral part of many investors’ portfolios with the objective of harnessing the potential of the stock market in an easy and cost-effective manner. This investment option continues to offer attractive and diverse opportunities for both existing and first-time investors.
The JSE is committed to making the exchange and investing more accessible and thereby helping South Africans establish a culture of investing. It is easy and quick to buy or sell ETFs on the JSE through a stockbroker trading account, or through an online ETF platform offered by financial services providers (FSPs). Your chosen service provider is equipped to help you with any extra information you may need before making this investment choice. A list of JSE stockbrokers and some FSPs is available on the JSE website. “An ETF gift provides your loved ones with a long-term investment and an opportunity to establish a foundation for wealth creation. Make a difference this festive season, with a gift that transcends the here and now,” concludes Hattingh.
To learn more about ETFs and how to start your investment journey, click here to visit our website.
ABOUT THE JSE
The Johannesburg Stock Exchange (JSE) has a well-established history operating as a marketplace for trading financial products. It is a pioneering, globally connected exchange group that enables inclusive economic growth through trusted, world class, socially responsible products, and services for the investor of the future. It offers secure and efficient primary and secondary capital markets across a diverse range of securities, spanning equities, derivatives, and debt markets. It prides itself as being the market of choice for local and international investors looking to gain exposure to leading capital markets on the African continent. The JSE is currently ranked in the Top 20 largest stock exchanges in the world by market capitalisation, and is the largest stock exchange in Africa, having been in operation for 130 years.
As a leading global exchange, the JSE co-creates, unlocks value & makes real connections happen.
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