Low-cost investing with Satrix

Satrix has released a new range of funds which has reduced the cost of investing

CoinsSince Sanlam bought out Satrix two years ago it has been implementing some interesting changes which have improved the offering to investors wanting to access low-cost passive index funds.

Satrix built its brand by offering exchange-traded funds (ETFs) which allow retail clients to track the stock market’s performance at a relatively low cost. Investors can purchase the ETFs either through a stockbroker or via the Satrix Investment Plan. Using the Investment Plan allowed investors to make monthly investments or a minimum lump sum of R1000. The underlying fund management costs are relatively low (around 0.5% depending on the fund) however there is an additional 0.7% administration fee for utilising the Investment Plan which brings the total costs of investing to over 1% per annum.

By utilising the existing Sanlam unit trust platform, Satrix now offers index-tracking unit trusts which has reduced the administration costs of investing on a monthly basis. Investors can access many of the indices offered by Satrix ETFs through the unit trust platform – for example the Satrix Top 40 Index Fund, Satrix Dividend Plus Index Fund, Satrix RAFI 40 Index Fund and MSCI World Equity Feeder Index Fund. The total cost for both the underlying fund fee and administration is 0.6% per annum, making it one of the most cost-effective investment options for someone wanting to invest R500 per month or a lump sum of R10 000.

In addition to the simple index-tracking funds, Satrix has created blended index portfolios on its unit trust platform. The Satrix Balanced Index Fund provides investors with diversified exposure to all major asset classes, including offshore exposure, and recently Satrix launched the low-equity balanced index fund for more conservative investors. Both of these funds meet the pension fund regulations and can be used in retirement funds. Satrix aims to launch a low-cost retirement annuity later this year and there are also plans to launch new international feeder funds.

The Satrix range of exchange-traded funds remain a good option for investors who wish to invest in a diversified portfolio through their stockbroker as well as for investors who wish to invest lower amounts, as the minimum monthly investment for a Satrix ETF is R300pm with a minimum lump sum of R1000.

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