Stephen Cranston Writer & columnist

It was simple in the days when there was one reputable index tracker, Satrix 40, and it was the only exchange traded fund (ETF). Now R84bn is invested into 97 ETFs and their close cousins, exchange traded notes (ETNs). Many people are put off because ETFs have to be bought through a stockbroker, and are intimidated by the walnut panels and fob watches which populate the classic stockbroker’s office. This is changing now that more relaxed shops have opened, for example EasyEquities from the Purple Group. And ETFs are rarely available on the linked investment platforms through which almost all financial advisers invest. ETFs at least are considered collective investments but few financial advisers are allowed to sell ETNs. This is no bad thing. While it is compulsory for ETFs to replicate an index, holding the shares in exact proportions, an ETN is just a promissory note from a bank to give the relevant return. They can provide a much wider range of options than standard ETFs — Absa a...

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