Mike Brown, the founder of ETFSA, was a key participant of the first Exchange Traded Fund (ETF), which was listed on the JSE on 27 November 2000.
This first South African ETF, the Satrix 40, listed 25 years ago, was the outcome of three parties: the JSE itself, and two independent investment banks, Gensec Bank and Corpcapital Bank, working together to bring this unique product to the South African investment public.
At the time, a portfolio of 40 different companies that make up the Top 40 index, daily valuations of the portfolio, market making, physical, or in-specie, delivery of baskets of top 40 securities, were all new concepts for the market regulators and financial legislators.
Working through this agenda of new features for a listed security took some time, but was rewarded by Satrix 40 being one of the more successful JSE listings of the time. More than R2.65 billion was raised in an IPO held in the weeks leading up to the listing, with many thousands of small and first time investors attracted to the idea of investing in one ETF share, but owning an entire blue chip portfolio of 40 shares, giving instant diversification, top quality exposure and the convenience of daily transparency and liquidity.
The name Satrix – South African index trackers – quickly became one of the best known financial brands in South Africa a distinction that it maintains to this day.
Mike Brown, as the Gensec Bank representative on the team that developed Satrix 40, was a key figure in the development, marketing and education about the product for the public. Now, 25 years later, he retains a high profile in the ETF industry in South Africa, very often being called “the Father of the SA ETF industry”.
