In a move that demonstrates just how seriously the country’s largest financial institutions are taking the trend towards the use of passive investment products, Standard Bank and Stanlib have merged their respective index-tracking businesses into a single new entity, called 1nvest.
1nvest has been endowed with a portfolio of 28 products comprising assets under management of R12bn after its owners moved all non-balance sheet passive products into the entity. Erasmus says with access to the distribution channels of Liberty, Stanlib and Standard Bank, 1nvest can capture a lot of the flows into passive products.
As opposed to employing a fund manager to oversee the investments in a portfolio, passive products aim to mirror the performance of an index such as for example, the FTSE/JSE Top 40 index, thereby delivering returns as close to those of the market as possible.Passive products have become popular globally due to their low cost and the inability of active managers to consistently outperform the market.
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