South African active managers no longer see active ETFs as a threat

South African fund managers no longer treat actively managed ETFs as the competitive threat they once did. In Prescient Fund Services' latest survey, reported by ETF Express, none of the investment professionals who responded regard them as a risk to traditional unit trust businesses; most now view the wrapper as a way to attract new clients and broaden market access.

Those responses anchor the 2026 Prescient ETF Evolution Report, the group's second annual look at a market moving beyond plain passive index tracking into actively managed, income, balanced, fixed income and global feeder products. Its headline number is 88%, the share of respondents who expect active ETFs to record meaningful growth over the next five years and mature into a core portfolio building block beside unit trusts and index trackers. Prescient calls that expectation a structural shift.

New product launches alone will not carry the next phase, the study argues, because growth will depend as much on distribution and operating infrastructure—a conclusion Prescient says travels well beyond South Africa while the UK and Ireland absorb their own wave of active ETF launches. The report explores the rising adoption of actively managed ETFs, the expanding role of ETFs in institutional portfolios, retail investor participation, and the distribution and operational considerations facing asset managers who bring products to market, with views drawn from Prescient's platform, management company, capital markets and fund services specialists.

Craig Mockford, chief executive of Prescient Fund Services, says the latest edition concentrates on the practical opportunities, challenges and infrastructure needed to support the next phase of growth; the company's first report, published in 2025, drew what he describes as genuine appetite for understanding a rapidly developing market.

The most important figure in the survey is zero. With no respondent still viewing actively managed ETFs as a threat to unit trusts, the argument over whether the wrapper belongs in an active manager's lineup is finished; what remains is how to run it. The growth expectation registered in the report is only as credible as the distribution and operating machinery South African managers build around it, and the report's own emphasis on distribution leaves that question open.