CHOOSE YOUR PLATFORM
What is an Exchange Traded Fund (ETF)? | What is a Unit Trust (UT)? |
A listed basket of securities tracking the performance of an underlying index. Investors buy or sell ‘shares’ in the ETF through a stock exchange in a single trade. | A fund that pools money from investors who have similar goals to invest in listed securities chosen by the fund manager. Investors buy or sell ‘units’ in the UT. |
Let’s Talk EFTs vs Unit Trusts
Satrix offers both Exchange Traded Funds – or ETFs – and unit trusts. But which is right for you?
Which Product is Right for You?
Satrix offers investors access to ETFs and UTs that track a range of indices – importantly, all of them are available as tax-free
investments (i.e., you can invest via your SatrixNOW tax-free savings account).
Here are the differences between ETFs and UTs you should know about.
| ETF | UT |
Highly Regulated | ? | ? |
Liquid | ? | ? |
Ease of Access | ? | ? |
Low Cost | ? | ? |
Performance | Similar to UT | Similar to ETF |
Dividends and Interest | Accumulate | Reinvest |
Holdings Transparency | Published Daily | Published Quarterly |
Pricing Frequency | Real-time | Daily |
Traded Through | Stock Exchange | Management Company (Manco) |
Settlement | T+3 | T+1 |
Brokerage Costs | Yes | None |
Availability | Varied | Varied |
1Performance between an ETF and UT tracking the same index will be similar, with variation down to cash flows, the difference in fund size and/or how dividends and interest are treated.
2An ETF is likely to have slightly higher cash balances as dividends and interest received are accumulated before being distributed or reinvested, whereas a UT reinvests faster. Here is further detail:
- Local ETFs Income Distribution: Net income is calculated and accrued daily and is declared and distributed quarterly. Declaration: Quarterly, in accordance with the JSE corporate actions timetable.
- Offshore ETF Feeders Income Distribution: The underlying fund does not distribute income so it is unlikely that any net income will be available for distribution.
- All UTs (except Satrix Money Market) Income Distribution: Net income is calculated and accrued daily and is declared and distributed semi-annually. Declaration: 30 June, and 31 December.
- Satrix Money Market UT Income Distribution: Net income is calculated and accrued daily and is declared and distributed monthly. Declaration: Last day of each month.
3The UT vehicle is also used by active fund managers who understandably need to keep their daily positioning under wraps so they publish their holdings quarterly.
4Unless you are trading funds daily (we don’t recommend) this difference won’t matter to you.
5ETFs are listed on, and trade through, stock exchanges like the Johannesburg Stock Exchange (JSE), while UTs are traded via the Unit Trust Management Company (or Manco).
6The settlement cycle for trading JSE listed securities like an ETF is currently three days, whereas you’ll receive your money a little sooner when selling a UT.
7Because an ETF is a listed security, trading it requires the use of a broker who will charge a small fee to execute the transaction.
8Not all the indices we track are available as both ETFs and UTs.
Where to Begin
Access Range
The Satrix Access Range offers two ETFs and two UTs that are flagship offerings with widespread investor appeal and suitability.
Satrix Top 40 ETF | Satrix MSCI World ETF | Satrix Balanced Unit Trust | Satrix Money Market Unit Trust