Intellidex 2020 reviews: Satrix Swix 40

Catch this insight by Intellidex on the South African equity market. This note is on the Satrix Swix 40 Index ETF. The Satrix Swix 40 Index ETF tracks the JSE top 40 index using Swix weightings, which only considers
shares held on the South African registry. This ETF is ideal for passive investors with an appetite for risk and seeking exposure to a portfolio of the biggest JSElisted companies.

Intellidex insight:The Satrix Shareholder-Weighted 40 Index ETF tracks the JSE top 40 index using Swix weightings, which only considers shares held on the South African registry. This means that while the ETF selects constituents based on their market capitalisation, companies listed on other exchanges, as well as the JSE, are downweighted according to the proportion of the size of the foreign holdings. The higher the percentage held offshore, the lower it's weighting in the ETF. This naturally reduces exposure to mineral resources stocks – which should suit the SA investor who is inherently exposed to that economic sector. However, Naspers has an abnormally high weighting in the index. This exposes investors to a significant capital loss should its share price dramatically drop.

The fund can be used as part of a core investment portfolio, since it is both cost- and tax-efficient. The ETF is eligible for taxfree investment accounts and only rebalances four times a year to reflect changes in the top 40 , which keeps costs down.Among the three JSE-listed Swix funds, Sygnia Swix ETF has the lowest total expense ratio (TER). High management fees (in this case the TER) can dent portfolio returns.

Fund description:The Satrix Swix Top 40 ETF tracks the FTSE/JSE SWIX Top 40 Index, which is made up of the largest 40 companies listed on the JSE, ranked and weighted by market capitalisation on the South African register

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Satrix Swix 40 ETF


Top holdings:The top 10 companies constitute 55.9% of the fund's portfolio. Naspers and Prosus (both with Chinese internet company Tencent as their main asset) have a combined abnormally high weighting in the index. This reduces diversification benefits one usually obtains from ETFs.

Satrix Swix 40 Top 10 holdings 2020

Suitability:This ETF is ideal for passive investors with an appetite for risk and seeking exposure to a portfolio of JSE-listed companies. While equities are inherently riskier than other asset classes, especially in short periods, they have performed better than inflation and other investment asset classes such as bonds and cash over longer periods.

Historical performance:

The fund’s performance is disappointing, returning less than 5% per annum in all periods under review. This is poorer than cash and bonds during the same periods.

Satrix Swix 40 Historical Performance 2020

Source: and January 2020 fact sheet

Fundamentals:Equities are driven by economic activity and, over long periods, have proven their ability to provide investors with growth ahead of other investment classes. The prospects for this fund are mixed, as the y are driven by both the South African economy and international exposure. The domestic economy is in recession, characterised by high unemployment, shrinking output and low confidence as government struggles to implement much-needed reforms.

The recent Covid-19 outbreak is ensuring an even worse economic performance this year and it is likely to prolong the recession. However, there are synchronised efforts globally to do “whatever it takes” to starve off the shock through monetary and fiscal support.

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Satrix Swix 40 ETF


Fund statistics:

1nvest Swix  40 fund Statistics 2020

Source: iress and January 2020 fact sheets

Alternatives: The fund’s closest peers are the 1nvest Swix 40 (TER: 0.29%) and Sygnia, which has the lowest TER of 0.16%.

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Satrix Swix 40 ETF Fact Sheet

Satrix Swix 40 Factsheet 2020

For more information around ETFs make sure to check out our new ETF site EasyETFs

Background: Exchange-traded funds (ETFs)

Exchange-traded funds (ETFs) are passively managed investment funds that track the performance of a basket of pre-determined assets. They are traded the same way as shares and the main difference is that whereas one share gives exposure to one company, an ETF gives exposure to numerous companies in a single transaction. ETFs can be traded through your broker in the same way as shares, say, on the Easy Equities platform. In addition, they qualify for the tax-free savings account, where both capital and income gains accumulate tax free.

Benefits of ETFs

  • Gain instant exposure to various underlying shares or bonds in one transaction
  • They diversify risk because a single ETF holds various shares
  • They are cost-effective
  • They are liquid – it is usually easy to find a buyer or seller and they trade just like shares
  • High transparency through daily published index constituents


This research report was issued by Intellidex (Pty) Ltd. Intellidex aims to deliver impartial and objective assessments of securities, companies or other subjects. This document is issued for information purposes only and is not an offer to purchase or sell investments or related financial instruments. Individuals should undertake their own analysis and/or seek professional advice based on their specific needs before purchasing or selling investments. The information contained in this report is based on sources that Intellidex believes to be reliable, but Intellidex makes no representations or warranties regarding the completeness, accuracy or reliability of any information, facts, estimates, forecasts or opinions contained in this document. The information, opinions, estimates, assumptions, target prices and forecasts could change at any time without prior notice. Intellidex is under no obligation to inform any recipient of this document of any such changes. Intellidex, its directors, officers, staff, agents or associates shall have no liability for any loss or damage of any nature arising from the use of this document. 


The opinions or recommendations contained in this report represent the true views of the analyst(s) responsible for preparing the report. The analyst’s remuneration is not affected by the opinions or recommendations contained in this report, although his/her remuneration may be affected by the overall quality of their research, feedback from clients and the financial performance of Intellidex (Pty) Ltd.

Intellidex staff may hold positions in financial instruments or derivatives thereof which are discussed in this document. Trades by staff are subject to Intellidex’s code of conduct which can be obtained by emailing mail@intellidex.coza.

Intellidex may also have, or be seeking to have, a consulting or other professional relationship with the companies mentioned in this report

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