19/05/2026
A lot of people just invest for the sake of investing but do not understand what they’re doing or why and follow the herd. This is costing you.
People with a small amount to invest waste their time stock picking when they should be investing into a stock index or ETF or Unit Trust product which replicates an index
They’ll buy a few shares but then buy an index ETF as well which actually duplicates your holdings and defeats the point of diversification
So let me help.
What is an index? It is basically a benchmark which shows how the market is performing. A popular index is the JSE Top 40. The JSE Top 40 is an index of which consists of the top 40 largest companies listed on the JSE by market cap. This is a benchmark index showing how the South African equity market is performing overall. This means it is a great tool for you to invest into for long-term growth in South Africa without needing to buy these shares individually.
So why buy an ETF on the Top 40?
1. Diversification: It allows you to buy into the top 40 biggest shares listed on the JSE, allowing you to get exposure to all of these shares at once.
2. Costs/Fees: buying into an ETF with R500 allows you to pay one fee, which is usually cheaper than having to split your R500 into multiple shares and pay multiple fees which could be higher
3. Makes life easier: You don’t need to stock pick. You only buy the ETF which essentially allows you to buy exposure to 40 different shares
What makes up the top 40?
The Top 40 Index contains 40 different companies, known as constituents or contributors. The current list is as follows:
1. BHP Group
2. AB InBev
3. British American To***co
4. Compagnie Financiere Richemont
5. Prosus
6. Glencore
7. Anglo American
8. Anglogold Ashanti
9. Naspers
10. Gold Fields
11. Capitec
12. Standard Bank
13. Firsthand
14. MTN
15. Vodacom
16. Investec Limited
17. Impala Platinum
18. Absa
19. Discovery
20. Sanlam
21. Shoprite
22. Sibanye Stillwater
23. Sasol
24. Bid Corporation
25. Northam Platinum
26. Nedbank
27. Investec PLC
28. Remgro
29. Reinet Investments
30. NEPI Rockcastle
31. Bidvest Group
32. Mondi
33. Aspen Pharmacare
34. Clicks
35. Old Mutual Limited
36. Growthpoint Properties
37. Exxaro Resources
38. Woolworths
39. Mr Price
I see a popular Top 40 ETF is the Satrix Top 40 ETF. To show the power of investing over the long-term and ignoring the noise (remember 2020 initially the markets dropped and people panicked, but it recovered and rallied), if you invested R1,000 per month, every month since 2020, your investment portfolio would be worth R125,600, which is more than if you had invested into the Satrix S&P 500 ETF (only R118,400)!!
Moral of the story? Don’t waste your time stock picking if you don’t have a large portfolio