STEPHEN CRANSTON: ETFs still a favoured investment avenue despite a difficult year in 2018
Although many financial advisers are more of sales and marketing personnel, the exchange-traded fund products (ETFs) they are punting still remain a good investment route to the equity markets
It is now quite suitable for retail investors to use exchange-traded funds (ETFs) as the building blocks for their investment strategies. These funds are all index trackers in SA, though there is no reason we should not follow international trends and introduce active funds in the future. For now, though, the Financial Services Conduct Authority (FSCA) only approves funds that track existing indices. There are some practical differences to a traditional financial adviser-driven unit trust-based strategy. ETFs must be bought through a stockbroker, and that doesn’t mean going to one of those wood-paneled offices to deal with a slightly intimidating man in a suit. Ironically, that more accurately describes going to a financial adviser these days, since they no longer come to chat with you around the kitchen table but expect you to go to their offices, usually decorated like a stuffy gentleman’s club. Buying ETFs through the likes of EasyEquities or Absa Online seems like buying direct,...