Satrix: Satrix Officially Crowned as Best in Business

Investments, stocks, shares, exchange traded funds (ETFs), linked investment service provider (LISP), indices, index tracking, unit trusts? While many people may perceive these as the bastion of the wealthy, Satrix CEO Helena Conradie and her team are working hard to change this perception.

South Africa’s first ETF business has spent two decades tirelessly focussed on financial inclusion and democratising investing. “Our goal is to bring more and more South Africans into the investment space,” says Conradie.

Satrix is the South African industry provider of index-tracking products (collective investment schemes that follow the movement of a market index, such as the FTSE/JSE Top 40 index). The index tracking business was the first to introduce ETFs to South Africa more than 20 years ago, via the Satrix 40 ETF. Today, Satrix manages assets in excess of R130 billion.

During what has been a challenging time for markets around the world, Satrix has continued to work hard to foster widespread financial democratisation.

As a result, for the fourth consecutive year, the Satrix 40 ETF was named the country’s favourite ETF by public vote at the South African Listed Tracker Funds Awards (SALTA) in March this year. Satrix also collected several other accolades at the SALTAs.

Another outstanding accolade in the same month was Satrix being named Best Fund House in the Larger Fund Range in South Africa by Morningstar, a global financial services firm. Satrix was the first South African index investing business to be awarded the honour by the investment research house which has 35 years’ experience.

PEOPLE’S CHOICE

“From day one, our purpose has been for all South Africans to ‘own the market’. This is a responsibility we take extremely seriously. Our aim is to bolster the country’s economy by empowering more people to invest with confidence. This makes the SALTA People’s Choice award particularly meaningful. It demonstrates that our deliberate actions to foster inclusivity and provide investment access to all South Africans are having an impact. It is a real honour as we know those who voted for us are on their own journeys towards investment success. It’s a privilege to know we’re playing a part,” says Conradie.

She says the awards also indicate the pivotal role index investing now plays in the industry. Satrix’s sustained success shows how vital passive allocation has become in a portfolio. “These awards are in fact a win for the whole index investing industry which is going from strength-to-strength relative to active asset management.”

The Morningstar award was also particularly pleasing for Conradie who has been with the business since the beginning and has seen much change across the industry.

“The award acknowledges the house that has consistently added the most value to investors. At the end of 2020, we were the house with the strongest performing fund line-up, on a risk adjusted basis, over one, three and five years. That doesn’t happen overnight and is confirmation for us as a business that we are on the right track.

“These awards have helped us as a business and driven the brand, enabling us to reach more people who need to be included financially,” she says.

MANY MOVING PARTS

It should come as no surprise that Satrix managed to achieve such success. The team of people behind the business – which Conradie highlights as the reason for its achievements – has 173 years of combined industry experience and a diverse mix of skills. The ability to manage multiple equally important and challenging business elements is what truly separates the company.

“Over 20 years, we have put many important initiatives in place,” she details. “First mover advantage, strong strategic support from Sanlam, a resilient brand with a purpose, a diverse and skilled team, an ownership culture, the right partners – it’s not just one of those things that sets us apart. The magic happens when these elements work together; that is what makes us different.

“We launched the first ETF in November 2000. At that stage, few people knew about index investing in South Africa, and Sanlam, CorpCap, Gensec and the JSE came together, with Sanlam investing more than R2 billion as seed capital for the Satrix 40 ETF. Their vision was almost prescient. You don’t often see such entrepreneurial flare from large financial services companies. 

“I began my career as a quantitative analyst,” adds Conradie, “I was far more involved on the institutional side of the business. It was only when I started working on the direct side that I realised how transformative working with the end investor could be. When you meet an investor and they look you the eye and trust you with their R200, that is when what we do really speaks to you. We are trusted to take someone else’s money and help it grow.

“In 2006, we launched the Investment Plan. There was a perception that the stock market is only for rich people, but we started letting people invest as little as R300 per month. In 2012, we partnered with Easy Equities, which enabled us to offer no minimum investment amounts, so you can start with R20 or R50. That is true financial inclusion, something which we are very proud of.”

Today, the Satrix 40 ETF is widely viewed as one of the most cost-effective ways of getting exposure to the largest companies on the JSE. Starting with either a lump sum investment or a debit order, clients can quickly and easily access the market. The Satrix DIVI is also easy to understand and tracks the top dividend paying companies on the JSE. The company has a range of offerings for different appetites of both investment and risk.

CONTINUED GROWTH

Even with the challenges posed in 2020 by a global pandemic, Satrix enjoyed a brilliant year thanks to its hard-working team and the support of its clients.

“It was a very tough year,” admits Conradie. “I have so much appreciation for the business and the team because everyone put their heads down and pulled together with a real commitment. In the end, it turned out to be our best year ever. These awards are testament to that. It was incredible to see, in terms of fund flows, that people were saving and investing more. Maybe the whole situation taught us that you must provide for emergencies and for times that are not easy.”

Witnessing an increasingly diverse range of investors coming into the market is proof for Conradie that Satrix’s vision is achieving its purpose.

“The JSE has an initiative called SHE Invests. Back when we could gather as a group, we would easily get 600 women coming together over a long weekend to discuss investing and engage with industry experts. There is a hunger from people to know more so that they can become financially free. That need for information is a driver for us to be there on the ground, speaking to people. It’s amazing to see and it energises you,” she says.

The company will look to take this energy forward through 2021 and beyond as expansion continues, with new products being rolled out and new geographies being opened up to investors looking for offshore opportunities.

“We have launched quite a few global funds that give access to developed and emerging global markets, as well as China, the Nasdaq 100 and S&P 500, and we plan to add to that. We currently have eight global ETFs, and we will list more,” says Conradie. “We are busy investigating the global megatrends driving economic growth such as smart cities, infrastructure and healthcare, and we feel there are many opportunities out there.  Locally, we will launch an inclusion and diversity product. We are looking at new markets that will help us broaden our client base.”

In 2020 Satrix launched the mobile app version of their online platform, SatrixNOW. As a tool for investors to keep track of portfolios and the various new ETFs on offer, the development of this app shows a desire to change and grow alongside the client. It has all the hallmarks of the Satrix process – easy to use and understand, intuitive, and secure.

With markets still changing and adjusting as the pandemic aftershocks continue to create new challenges, Satrix is looking at what can be done to expose investors to the obvious benefits that exist in the index market space. 

For more than 20 years, Satrix has been delivering innovation to clients and now this multi-award-winning organisation is looking ahead at dynamic ways to welcome more people into the world of investing.