The JSE, ETFs, and Unit Trusts: SA Investing 101

Once you're ready to move from cash into growth assets, three terms come up constantly: the JSE, ETFs, and unit trusts. Here's what each one actually is, without the jargon.

The JSE: where shares change hands

The Johannesburg Stock Exchange (JSE) is South Africa's stock exchange — the marketplace where shares in publicly listed companies are bought and sold. When people talk about "investing in the JSE," they usually mean buying shares (or funds that hold shares) of companies listed there, rather than the exchange itself being something you invest "in" directly.

Buying individual shares means picking specific companies and carrying the risk of how that specific company performs. For most people starting out, that's a harder and riskier way in than the two pooled options below.

ETFs: a basket of shares, traded like one

An exchange-traded fund (ETF) holds a basket of underlying assets — often shares from an entire index, like the top companies on the JSE — and trades on the exchange throughout the day just like an individual share. Buying one unit of an ETF gives you exposure to everything inside it, instantly diversified across many companies rather than betting on one.

Unit trusts: pooled, but priced once a day

A unit trust (also called a collective investment scheme) pools money from many investors into a fund managed by a fund manager, who decides what to buy and sell inside it. Unlike an ETF, a unit trust isn't traded on an exchange throughout the day — it's priced and traded once, typically at the end of each day.

The practical difference that usually matters most

Both are ways to get diversified exposure without picking individual shares yourself. The most practical differences for a new investor are usually: how actively the fund is managed (many ETFs simply track an index; many unit trusts are actively managed, with a fund manager making calls), how and when you can buy or sell, and the fee structure — which varies fund by fund and is always worth checking on the fund's own fact sheet before investing, rather than assuming one structure is cheaper than the other.

Where this fits into your plan

None of this needs to be complicated to start. A single, broad, low-cost ETF tracking a major index inside a TFSA (lesson 2) is a genuinely reasonable starting point for a new investor — the next two lessons build on why starting early matters (lesson 4) and how to think about risk relative to your own timeline (lesson 5).