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Online ETF platforms compared

The funds and the costs.

This week passive investment manager CoreShares announced that it had launched its own online investment platform called ‘CoreShares Online’. It is designed to provide access to its suite of exchange-traded funds (ETFs) to investors who don’t have their own stock broking account.

CEO Gareth Stobie said that the intention is to make investing easier and more cost effective. For most, if not all retail investors, being able to access CoreShares’ products directly will be cheaper than doing so through a traditional stock broker.

The move by CoreShares follows only a few weeks after asset manager Sygnia signed a deal to acquire the db x-trackers ETFs from Deutsche Bank. Discussing its plan for these funds, Sygnia said that it too has plans to make its ETFs available through an online platform that will also focus on lowering the cost of access.

There is clearly a trend in the industry to use technology to make exchange-traded products more accessible. When Satrix launched the first ETFs in South Africa in 2000 investors could only buy them through a stock broker or Satrix’s own investment platform, which was (and remains) a bit unwieldy and not particularly cost effective. But Satrix too has introduced an online option through SatrixNOW, which is supported by EasyEquities and uses the same technology.

Investors now have a range of options available to them, and it is therefore worth looking at what the various platforms offer.

CoreShares Online

As the latest addition to the market, CoreShares Online has developed a very user-friendly look and feel. It is also mobile-friendly, ensuring that it appeals to a generation of investors who want to be able to do everything on their phones.

At brokerage of 0.1%, the transaction fees are the lowest of any platform currently available. However, there is an annual charge, which its current competitors do not have.

Costs: Annual platform fee of 0.3% plus VAT. Buying and selling incurs brokerage of 0.1% plus VAT. CoreShares Online also offers a tax-free savings account at the same costs.

Products available: CoreShares Top 50, CoreShares Proptrax SAPY, CoreShares Proptrax Ten, CoreShares Preftrax, CoreShares Divitrax, CoreShares LowVoltrax, CoreShares Green, CoreShares Equally Weighted Top 40, CoreShares S&P Global Property, CoreShares S&P 500.

Minimum investments: R250 per month or R1 000 lump sum.

EasyEquities

Although EasyEquities is not an ETF-only platform, it is such a compelling offering that it has to be included in any comparison. The online broker was the first to offer truly low-cost access to exchange-traded products in South Africa.

Opening an account with EasyEquities will also give investors access to all of the ETFs and exchange-traded notes (ETNs) listed on the JSE, which is not currently possible through specific product providers. EasyEquities also offers fractional share ownership, which means that investors can buy up to 1/1000th of a security. This means that their full contribution is always invested and there aren’t any leftover funds sitting in cash.

Costs: Buying and selling products attracts brokerage of 0.25% plus VAT. There is no ongoing charge. EasyEquities also has a tax-free savings account offering at the same fees.

Products available: All JSE-listed exchange-traded products. ETNs are not however available in a tax-free savings account.

Minimum investments: No minimums.

SatrixNOW

The SatrixNOX experience is based on the EasyEquities platform and so therefore has all of the same benefits, including fractional ownership. It however only offers access to Satrix ETFs.

Costs: Brokerage of 0.25% plus VAT when buying or selling funds. There is no ongoing charge. Satrix also has a tax-free savings account offering at the same fees.

Products available: Satrix 40, Satrix DIVI, Satrix FINI, Satrix ILBI, Satrix INDI, Satrix Property, Satrix RAFI 40, Satrix RESI, Satrix SWIX 40.

Minimum investments: No minimums.

Absa Stockbroking ETF only account

This unique offering from Absa Stockbroking allows investors to open a dedicated account for investing in ETFs. What is particularly compelling, however, is its tax-free savings account option, which comes with reduced fees.

As with EasyEquities, investors have access to the full range of JSE-listed ETFs. There is also no monthly or annual fee.

The one drawback of Absa Stockbroking’s offering is that it currently does not cater for monthly debit order contributions. It however plans to introduce this facility soon.

Costs: Buying and selling ETFs attracts brokerage of 0.20% plus VAT. There is no minimum brokerage in the tax-free savings account, but a minimum brokerage of R20 is charged in the standard ETF only account. There is no ongoing charge.

Products available: All JSE-listed ETFs.

Minimum investments: There are no minimums on once-off investments. The planned minimum for monthly debit orders is R250.

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Hi Patrick, thanks as always for the ongoing coverage of the passive and ‘fintech’ worlds!

From our side I would also like to point out that both Easy Equities and ABSA Stockbrokers are partners of ours in a sense and we will continue to work with them on client educational programs and the like. As you note our ETFs are available on both of these platforms. We are appreciative of their technologies and efforts in the market.

The decision to build our own was to simply broaden the opportunity for clients to engage directly with our brand & should compliment the other access points.

Hope clients like the new platform! You’ll note we have put some extra effort into the dreaded FICA process..

Kind Regards

Gareth (CoreShares)

Would love to see comparisons on local world/webtrader ETF platforms giving access to markets other than the JSE.

Nothing can be compared to easy equities. soon they will introduce rafs and an app.

The biggest problem with ETF investing through online platforms such as Easy Equities is that such platforms are only finalising trades at the end of business day prices for such ETF’s and not at the direct life prices at the time you trade. Unit trusts participation are also done at the unknown future price at the close of trading the following business day.

Therefor the most basic and distinguishing feature of share trading is absent from these online platforms namely buying at a willing offer price (placing a maximum buy-in price offer) or selling at a willing price (placing a minimum acceptable selling price).

Other than that, ETF investing, especially through means of the tax-free savings vehicle is a true low cost and good way of participating in the JSE.

France

With ABSA stockbrokers you see the live offer and bid prices and you select your own limit order, so you are in full control.

Security trades via the Easy Equity platform are executed at the prevailing market price, quoted by the relevant recognised exchange for that security, at the time they execute your trade.

And yes, ETFs experience price changes throughout the day as they are bought and sold.

I’m a bit confused on these offerings except for ABSA’s offer. CoreShares S&P500 as an example has a TER of 0.45%, but now they want another 0.3% annual charge + vat, yes the brokerage is low but your annual fees are going to sway others away, if I’m correct on the fee structure. I have an ABSA stockbroking with many ETF’s and stocks in them, I guess I should open the ABSA ETF only account and migrating them across as I purchase ETF’s monthly, saves brokerage fees per month. Am I correct on this?

etfSA is very expensive. They charge 0.65%/year admin fee. I’ve spent a lot of time comparing etf platforms and found Easyequities the cheapest by a mile. But don’t take my word for it, compare it yourself and you’ll see.

ABSA’s ETF only account is now the cheapest as far as I can work out. On a R20,000 trade as an example you would pay R107.84 or 0.54% cost to you. They offer brokerage at 0.20% which is better than Easyequities, as with any trade you must add brokerage, vat, stt, settlement, ipl. On ABSA’s website there is a calculator to work out the total costs which is handy, and its free to try out

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