Shares for all is Satrix’s main aim
● Fikile Mbhokota, the CEO of passive investment platform Satrix, is on a mission to get more people investing in the stock market because wealth creation is not where it should be 30 years after democracy.
“If you think about where we come from as a country and as a nation, since the dawn of democracy in 1994 a lot of people have focused on equal access to jobs and job inclusion,” she said.
“Now that people have equal access to jobs, there is not a lot of focus on wealth creation. When you get that money, what do you do with it? How do you create wealth not only for yourself but for the next generation?”
Previously an investment manager at the Government Employees Pension Fund, Mbhokota was appointed Satrix CEO two years ago. The platform, owned by insurance giant Sanlam, has a tool that tracks the performance of the top 40 stocks on the JSE, offering people the chance to invest as little as R1 into a basket of shares either exchange traded funds (ETFs) or unit trusts.
This year assets under management breached the R200bn mark across 145 markets. It also offers retirement annuities and a tax-free savings account.
Mbhokota says the aim is to get as many people as possible to invest in the stock market.
“Democratising investment means promoting financial inclusion, ensuring that the person in the street can invest with the R1 they have made. The person who sells fruit can say, ‘I made R50, I’m going to take R2 and invest it into the Satrix Top 40’. It is about going to a village in Limpopo and getting a teacher to start investing. It is about getting everybody and anybody to start investing and creating wealth.”
Compared with its peers, Satrix owns the largest market share in the passive investment space, an indication that customers believe in its products, Mbhokota says.
Satrix’s market share in the passive space has increased from 34% to 37%, which she attributes to customers realising the affordability of index-tracking investments.
“If you look at our Top 40 ETF, we charge that at 10 basis points, which is cheap when compared to other active management investments. I think it is great for us as a business, it talks to the global marketplace. For the first time in the US, the passive or indexation space is more than 50% of the investment market. Europe is sitting at 27%, so growth has been phenomenal.”
The Satrix Top 40 and the MSCI, another ETF that tracks developed markets indexes in rand, are popular products, she says. There is a growing appetite among local investors for the MSCI index as more people wanted to increase their exposure to offshore markets.
However, she says Satrix has seen the level of withdrawals increasing as a result of tough economic times.
“Most of our members either do one-off investments or invest through debit orders. We find the rate of debit orders has been maintained; it is only that the level of withdrawals has increased. I understand; it is tough. Interest rates are high, the inflation rate has been high, the rand has been weak, and the oil price has been volatile. All sorts of things are impacting the consumer.”
However, despite the increase in withdrawals, Mbhokota says Satrix is seeing net inflows, which shows that people are still committed to creating wealth for themselves.
She believes South Africa has potential as a long-term investment destination. “If you think from a long-term perspective, I think there is value to be had. If you look at our market, it is quite cheap. I think it’s attractive if you want to invest over the long term.”