What Does Your Local Equity Actually Own?

By Siyabulela Nomoyi, Quantitative Portfolio Manager at Satrix 

21 September 2026 – There’s a better way for investors to bet on the South African economy, and now might be a smart time to do it. This is, at heart, a Heritage Month story: about claiming what’s ours rather than treating it as someone else’s to tell. There’s a version of that idea that belongs in an investment portfolio, and it starts with understanding what your local equity allocation actually owns.

Although South Africa’s stock market (specifically, the FTSE/JSE All Share Index) hit an all-time high in March 2026, the broad JSE is not a picture of the South African economy. The index holds large SA corporate companies (some are inward listed) that derive a significant portion of their revenue overseas. In fact, only about 41% to 45% of the revenue behind the Top 40 and the Capped All Share comes from South Africa.

Saying “the JSE is up” doesn’t mean “the South African economy is doing well.” This year, it has meant close to the opposite. Ordinary South Africans are getting squeezed, and the chain of cause and effect is quite direct. Oil prices spiked because of the US/Middle East conflict (up 34.3% year-on-year in June), which made petrol and taxi fares far more expensive, with transport inflation hitting 12.7%. That pushed headline CPI to a two-year high of 5.0% in June, and the South African Reserve Bank responded by holding the prime lending rate at 10.5%.

Meanwhile, unemployment climbed to 33.6% in Q2 2026, close to its highest level in years; and consumer confidence collapsed from -7 to -19 in the space of a single quarter as the fuel shock worked its way through household budgets.

There’s a real gap between “the market” and “the actual local economy”. And if you own a typical South African share portfolio, you might think you’re invested in South Africa, but you’re mostly invested in global commodity prices and the dollar.

A Fund Built To Close That Gap

The Satrix SA Inc AMETF (JSE code: STXSAI), is built specifically to fix that gap. It listed on 24 February 2026 – just days before the oil shock began – and has spent its first six months absorbing, in real time, the local economy squeeze it was designed to measure.

The fund tracks the proprietary Satrix SA Inc Index, a rules-based index built in-house rather than licensed from a third party. It upweights companies that generate much of their revenue locally, directly capturing improving sentiment for local economic conditions and currency appreciation. The fund is rebalanced quarterly and has a total expense ratio of 0.35%.

The output? Roughly 80% of the index’s earnings are generated inside South Africa, compared to about 41% to 45% for the JSE Top 40 and Capped All Share indices – so it actually tracks the domestic economy. That gap makes a strong argument for holding the fund alongside, not instead of, a broad local equity core.

The (Hidden) Good-News Story

It might seem strange to make that case in the middle of a squeeze on households. But the pressure South Africans have felt this year is largely the result of several shocks – the spike in oil prices, unemployment, and other factors – landing on top of an economy whose underlying structure has in fact been quietly repairing itself. 

The oil shock shows up immediately, at the pump or in a taxi fare. The structural repairs take longer to show up anywhere at all, which is why they’re easy to miss.

Markets try to price the future, and the news underneath the noise has been unusually good. Eskom recorded just four days of load shedding in its latest financial year, against 329 days two years earlier. The 2026 Budget Speech reported that government debt would stabilise for the first time in 17 years. South Africa came off the Financial Action Task Force (FATF) grey list, and both S&P Global and Fitch upgraded the country’s credit rating – Fitch’s first upgrade in over two decades – while Moody’s shifted its outlook to positive, pointing in the same direction. National Treasury and the Reserve Bank also formally adopted a 3% inflation target.

None of that shows up quickly in a quarterly GDP print. All of it shows up eventually in the cost of capital. A sovereign upgrade, less load shedding, a stable debt trajectory, and a credible inflation target all reduce the risk a lender or investor attaches to South Africa. Those same factors make an investment in South Africa’s actual economy look attractively priced right now – priced, in effect, for the squeeze that’s visible today rather than the repair work that isn’t.

The Case For Owning Local

Most local equity allocations are, on the numbers, more than half a bet on metal prices and the dollar. Choosing instead to own the banks that lend into this economy, the insurers that carry its risk, the retailers that feed it, and the miners that employ people here – at home, in South Africa – is not sentimentality.

It is a deliberate, measurable, priced decision. And right now, it is priced cheaply.

Disclaimer: 

Satrix Investments (Pty) Ltd is an authorised Financial Service Provider (FSP) in terms of the Financial Advisory and Intermediary Services Act, 2002 (FSP no 43670). Collective investment schemes are generally medium- to long-term investments. With Unit Trusts, Exchange Traded Funds (ETFs) and Actively Managed ETFs (AMETFs) the investor essentially owns a “proportionate share” (in proportion to the participatory interest held in the fund) of the underlying investments held by the fund. With Unit Trusts, the investor holds participatory units issued by the fund while in the case of ETFs and AMETFs, the participatory interest, while issued by the fund, comprises a listed security traded on the stock exchange.  ETFs and AMETFs are registered as a Collective Investment and can be traded by any stockbroker on the stock exchange, LISP platforms and or via online trading platforms. ETFs and AMETFs may incur additional costs due to being listed on the JSE. Past performance is not necessarily a guide to future performance, and the value of investments / units may go up or down. A schedule of fees and charges, and maximum commissions are available on the Minimum Disclosure Document or upon request from the Manager. Collective investments are traded at ruling prices and can engage in borrowing and scrip lending. Should the respective portfolio engage in scrip lending, the utility percentage and related counterparties can be viewed on the ETF and AMETF Minimum Disclosure Document. AMETFs are ETFs which are actively traded by a Portfolio Manager to adjust the AMETF holdings and asset allocation with the aim to outperform the benchmark. AMETFs differ from ETFs which only track indices. The Manager does not provide any guarantee, either with respect to the capital or the return of a portfolio. The index, the applicable tracking error and the portfolio performance relative to the index can be viewed on the ETF and AMETF Minimum Disclosure Document and/or on https://satrix.co.za/products.