REGULATORY EVOLUTION AND MARKET OPPORTUNITY

The JSE’s October 2022 rule change was a pivotal moment. Prior to this, ETFs in South Africa were required to track a published index, effectively excluding any form of discretionary management. The new framework permits the listing of AMETFs, enabling fund managers to construct portfolios based on active decisions, while still offering the liquidity and transparency of listed securities.


This development mirrors broader trends in Europe, where actively managed ETFs have gained traction. According to ETFGI, European ETF assets surpassed $3.01 trillion at the end of September 2025, up from $2.27 trillion at the end of 2024—a 32.6% year-to-date increase. Active ETFs alone attracted $27.03 billion in net inflows year-to-date, more than double the amount gathered by this point in 2024  .

 

THE BALANCED FUND LANDSCAPE IN SOUTH AFRICA

South Africa’s CIS industry had nearly R4 trillion in assets under management as of mid-2025, with 49.5% of those assets held in multi-asset portfolios  . These balanced funds have long been the preferred choice for retirement savers and discretionary investors, offering a blend of growth and income across asset classes. However, they remain unlisted, requiring investors to transact through platforms or intermediaries, often with limited transparency and delayed settlement.


The introduction of balanced AMETFs changes this dynamic. Investors can now access actively managed, multi-asset portfolios directly on the JSE, with real-time pricing, daily transparency, and intraday tradability. This innovation enhances accessibility and introduces a new layer of flexibility for portfolio construction and asset allocation.

 

THE BENEFITS OF REGULATION 28 BALANCED PORTFOLIOS IN ETF FORMAT

One of the new arrivals to note is the Regulation 28-compliant balanced portfolio in ETF format. Regulation 28 of the Pension Funds Act governs the asset allocation of retirement funds in South Africa, ensuring diversification and limiting risk by capping exposure to certain asset classes. Traditionally, investors seeking Regulation 28-compliant solutions have relied on unlisted balanced unit trusts or CIS funds.

With the launch of balanced AMETFs that comply with Regulation 28, investors can now purchase a Regulation 28-compliant balanced ETF on the JSE, just as they would any other share or ETF.  This innovation is particularly relevant for retirement savers, pension funds, and advisors who need to ensure compliance with Regulation 28 while seeking the benefits of active management and multi-asset diversification.

 

A GROWING MARKET WITH EXPANDING CHOICE

The market for AMETFs is growing rapidly. There are now more than 30 actively managed ETFs listed on the JSE. This includes several balanced strategies, such as:

  • Prescient Balanced Feeder Actively Managed ETF – A Regulation 28-compliant fund offering exposure to local and global equities, bonds, property, and cash  .
  • ETFSA Balanced Foundation Prescient AMETF – Designed for long-term investors seeking diversified exposure across asset classes  .
  • EasyETFs Balanced Actively Managed ETF – A high-equity multi-asset strategy combining quantitative and qualitative approaches.

With more balanced AMETFs expected to come to market, investors will benefit from increased choice, better market dynamics, and the ability to tailor portfolios to specific risk and return objectives.

 

INVESTOR PROFILE AND STRATEGIC APPEAL

Balanced AMETFs are likely to appeal to a broad spectrum of investors:

  • Retail investors seeking diversified exposure in a single, listed product.
  • Financial advisors looking for Regulation 28-compliant solutions with transparent pricing and daily liquidity.
  • Institutional investors interested in tactical asset allocation and real-time execution.

These products offer the strategic flexibility of traditional balanced funds, but with the operational efficiency of ETFs. They are particularly well-suited to investors who value transparency, tradability, and the ability to respond quickly to market conditions.

 

CONCLUSION

The arrival of balanced actively managed ETFs marks a significant evolution in South Africa’s investment landscape. By combining discretionary portfolio management with the benefits of listed instruments, AMETFs offer a compelling alternative to traditional unit trusts. As more products come to market, investors will enjoy greater choice, improved access, and enhanced portfolio construction tools.

The availability of Regulation 28-compliant balanced portfolios in ETF format is a game changer for retirement savers and advisors, offering a new level of transparency, flexibility, and efficiency.  This is not just a regulatory change — it’s a structural shift that empowers investors and advisors alike to engage with multi-asset strategies in a more flexible and transparent way. The balanced AMETF is here to stay, and its role in shaping the future of investing in South Africa is only just beginning.


Disclaimer:
•    Collective Investment Schemes in Securities (CIS) should be considered as medium to long-term investments. The value may go up as well as down and past performance is not necessarily a guide to future performance. CISs are traded at the ruling price and can engage in scrip lending and borrowing. A schedule of fees, charges and maximum commissions is available on request from the Manager. There is no guarantee in respect of capital or returns in a portfolio. A CIS may be closed to new investors in order for it to be managed more efficiently in accordance with its mandate. A Feeder Fund is a portfolio that invests in a single portfolio of a collective investment scheme which levies its own charges, and which could result in a higher fee structure for the feeder fund. Exchange traded funds are listed on an exchange and may incur additional costs. Exchange Traded Funds vs Unit Trusts: Whilst both unit trusts and ETFs are regulated and registered under the Collective Investment Schemes Control Act, ETFs trade on stock exchanges just like any other listed, tradable security. Unlike a unit trust, which can be bought or sold only at the end of the trading day, an ETF can be traded intraday, during exchange trading hours.  Prescient Management Company (RF) (Pty) Ltd is registered and approved under the Collective Investment Schemes Control Act (No.45 of 2002). Prescient is a member of the Association for Savings and Investments South Africa.
•    Please note there are risks involved in buying or selling a financial product, and past performance of a financial product is not necessarily a guide to future performance. The value of financial products can increase as well as decrease over time, depending on the value of the underlying securities and market conditions. There is no guarantee in respect of capital or returns in a portfolio. 
•    This document is for information purposes only and does not constitute or form part of any offer to issue or sell or any solicitation of any offer to subscribe for or purchase any particular investments. Opinions expressed in this document may be changed without notice at any time after publication. We therefore disclaim any liability for any loss, liability, damage (whether direct or consequential) or expense of any nature whatsoever which may be suffered as a result of or which may be attributable directly or indirectly to the use of or reliance upon the information. For more information visit www.prescient.co.za