Each month, the investment gurus at Intellidex scan the market to come up with a list of their favorite ETFs. Know more about their top picks here.

Domestic Equities
  • CoreShares Top 50 (CTOP50)
International Equities 
  • CoreShares Total World Stock Feeder (GLOBAL)
  • Sygnia Itrix MSCI Emerging Markets 50 ETFs (SYGEMF) 

Bonds and Cash

  • Satrix SA Bond ETF (STXGOV)

Dividend or Income-focused

  • CoreShares S&P SA Dividend Aristocrats ETF (DIVTRX)

How did Intellidex come up with top picks?

Various empirical studies conclude that the bulk of equity returns stem from diversification among broad asset classes rather than from individual stock picking. As such, our grouping is done with a diversified portfolio in mind, ensuring appropriate exposure to different asset classes. First, we group the ETFs according to the three widely recognized asset classes – equities, bonds and cash. We further split equities into geographic groupings, then add a category for equity ETFs with an income theme.

What's in it for EasyVSTRs?

Our picks should provide an investor with a relatively diversified portfolio made up only of ETFs. However, asset allocation is not a one-size-fits-all concept. You need to make sure that weights of different asset classes in your portfolio meet your unique risk-and-return objectives. Multi-asset ETFs, which are already diversified among asset classes, are analyzed as a separate category.

As a rule of thumb, we like ETFs that follow a watertight investment philosophy. They should also be tax smart, which means they should qualify to be in a tax-free savings account. To avoid overconcentration, a good ETF should cap its exposure to a single sector and/or a single counter. While competition among providers is intensifying and ETF costs are coming down, we look at this metric closely and prefer ETFs with low total expense ratios (TERs). An overview of our favorite funds for each category follows.

Domestic equity

As is the case in major global economies, the decline in SA output seems to have slowed. The S&P Global SA PMI improved to 50.6 points in November from 49.5 in October. The increasing new business volumes supported employment numbers at firms, boosting the PMI. However, businesses continued to grapple with the hobbling effects of electricity blackouts which led to a decline in output levels and an increase in backlogged work.
  • From an equities perspective we start with rand hedges, with the most prominent being Naspers and Prosus. The pair returned a sizeable 38.7% and 40.5% off a very low base in November. Local fund manager Anchor Capital expects China-based gaming giant Tencent’s performance to be further driven by internal factors such as asset sales, restructuring and prudent capital management.

  • Tencent, which is 28% owned by Naspers through a 43% holding in Prosus, is the group’s main asset held alongside other high growth tech-education and e-commerce businesses. As such, Anchor’s strategic expectations imply that revenue growth does not need to be significantly high to drive earnings and cash flow at Tencent. Also, given that Naspers is expected to slowly sell down a portion of its stake in Tencent to drive shareholder returns, Anchor is positive on the investment case of both companies.

  • Anchor is also relatively positive on “SA Inc” with forward multiples being quite low and earnings expectations being moderate against a weak economic backdrop. Importantly, we believe that the low multiples provide a margin of safety when investing in SA. As a result, we think broad exposure through the CoreShares Top 50 ETF (+12% in November) would be a good core equity ETF holding.

CoreShares Top 50 (CTOP50) 

CoreShares Top 50


Foreign equity: CoreShares Total World Stock Feeder (GLOBAL)

Given JP Morgan’s expectations of moderate inflation and a mild recession in 2023, we believe that broad global equity exposure is the best way to implement a diversified ETF portfolio. Accordingly, our core pick for global equities is the CoreShares Total World Stock Feeder ETF (-2.2%), which consists of over 9,000 shares across both developed and emerging markets.
  • Emerging markets have come under significant pressure over the last 18 months. The MSCI Emerging Markets index was down 16% year-to-date by end-November.  However, China’s recent announcement of reduced lockdown restrictions should enable a better focus on the economy. Given the global economic slowdown, we also believe that gradually opening the economy will lead to more domestic activity in China, which would support company performance, earnings growth and share prices. Importantly, emerging market equities are quite cheap.

  • Global fund manager JP Morgan’s proprietary valuation composite for emerging markets, which includes price-to-earnings, price-to-book and price-to-cash flow ratios, as well as dividend yield show that the asset class is trading significantly below its long-term average. Emerging market equities are also cheap relative to global equities.

  • As such, our satellite pick is the Sygnia Itrix MSCI Emerging Markets 50 ETF (+10.3%). The ETF tracks the performance of the MSCI Emerging Markets Investable Market Index (IMI). The index captures large, mid and small cap representation across 24 emerging markets (EM) with 3,207 constituents, covering approximately 99% of the free float-adjusted market capitalization in each country.

CoreShares Total World Stock Feeder (GLOBAL) & Sygnia Itrix MSCI Emerging Markets 50 ETFs (SYGEMF) 

New call-to-actionSygnia Itrix MSCI Emerging Markets 50 ETFs

Bonds and cash: Satrix SA Bond ETF (STXGOV)

Data from the SA Real Estate Investment Trust Association show that the short-term correlation (five years to end-November 2022) between SA bonds and the all-share index is 0.44. Over the long-term (10 years to end November), this drops to a value of just 0.22. A negative correlation between asset classes is the best result, as the inverse co-movement of returns suggests that one asset class may outperform when another underperforms. Accordingly, we believe the data reflect the benefits of portfolio diversification over the long term.
  • Consequently, our pick is the Satrix SA Bond ETF (+4.2%) which we think would be useful for portfolio diversification purposes. However, the recent spike in bond yields owing to load-shedding and the political fallout surrounding President Cyril Ramaphosa is a reminder that government bond yields and prices are sensitive to local political developments.

  • As such, the ANC leadership contest outcome at its elective conference next week and SA’s fiscal policy in the lead-up to the 2023 budget and 2024 elections will have an influence on bond price movement.

Satrix SA Bond ETF (STXGOV)


Dividends: CoreShares S&P SA Dividend Aristocrats ETF (DIVTRX)

  • The CoreShares S&P SA Dividend Aristocrats ETF (+14.2%) is our pick for this month. We think that adding high dividend yield funds to ETF portfolios can be beneficial as a simple decomposition of the all share index’s annualised 8.6% return over the last five years to end-November shows that the price proportion of return was 4.6% and that the income return from dividends was 4%.

  • With dividends/income making up almost 50% of the total return of the market, the simple decomposition of the all share index total return highlights the importance of dividends as part of an investor’s returns. Furthermore, academic studies both locally and abroad find a strong relationship between dividends and the performance of share prices, further augmenting the usefulness of dividend yield as part of a portfolio strategy.

    CoreShares S&P SA Dividend Aristocrats ETF (DIVTRX)

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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 EasyEquities 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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