Exchange Traded Products (ETPs) include Exchange Traded Funds (ETFs) and Exchange Traded Notes (ETNs). ETPs are listed instruments that cost effectively pool investor funds and aim to replicate the performance of a market index or comply with a particular mandate.
Exchange Traded Products are similar to unit trusts, as they pool investor funds so that you can cost effectively access a large basket of underlying investment instruments. However, ETPs are passively managed, which means that they track a security, basket of securities or market index and no active investment calls are made.
Exchange Traded Funds track a wide range of instruments, including shares. Most ETFs are collective investment schemes (CISs) and are bound by CIS regulations.
Exchange Traded Notes track debt instruments only. They are not CISs but are regulated by the Johannesburg Stock Exchange (JSE).
Both ETFs and ETNs are listed on the JSE.
Trading Exchange Traded Products
- You have a wide range of ETPs to choose from. Choose to track domestic and foreign equity indices, commodity-based indices, property indices, 'style' and fundamental indices, bonds or multi-asset portfolios.
- ETPs trade intra-day and are always valued at prevailing market prices. This means that they can be redeemed at any time.
- Dividends and interest earned in ETFs can be automatically reinvested. ETNs are non-interest paying debt obligations and do not receive dividends.
- ETPs are exempt from Securities Transfer Tax but capital gains tax and income tax may or may not be levied, depending on the circumstances of individual investors.
- Returns on ETNs carry credit risk, and depend on the financial strength of their issuers who must have the money available when you want to sell your ETN.
- In South Africa, ETNs are not independently rated and rely on the credit of the issuer.
List of available Exchange Traded Products
Our platform gives you access to a range of ETPs offered by different companies:
As with any financial product, you need to understand the advantages and disadvantages of ETPs before investing. Make sure that you understand all investment costs and be aware that the performances of index trackers are generally better in upward trending markets.
If you would like to learn more, start by watching our
tutorials or can consider our seminars and webinars
For more information and how to invest or visit our FAQ page.
Looking to get started? register for an online trading account.