An actively managed exchange traded fund is a fund that is listed on a stock exchange in the same way that other exchange traded funds are, but instead of passively tracking 
an index or commodity, an AMETF is actively managed by a fund manager.
This means the fund manager actively selects shares, bonds or other securities for the fund and, in the case of multi-asset funds, will actively decide on the asset allocation of the fund, with the aim of outperforming the fund’s benchmark, which may be an index, a composite of indices, or a group of funds.
Actively managed ETFs are relatively new in South Africa as the JSE only amended its Listing Requirements to allow for the listing of AMETFs in October 2022. The first AMETF was listed in May 2023.
AMETFs can only be provided by a licensed financial services provider regulated by the Financial Sector Conduct Authority (FSCA) and the fund must also be registered as a collective investment scheme (CIS).
This means investors enjoy regulatory protection under the JSE listing requirements and the Collective Investment Schemes Control Act (CISCA). CISCA regulates all unit trust funds that are domiciled in South Africa, and which foreign-domiciled funds can be marketed here.
ETFs, including AMETFs, can be bought or sold on share trading platforms and are repriced throughout the day, unlike unit trusts which are priced at the end of the day only and can be bought or sold from the relevant unit trust company or through an investment platform (linked investment services provider (Lisp)).
You can buy an AMETF from a stockbroker or online stockbroker. You will need to open a trading account and you can buy a South African AMETF from any stockbroker in the world that offers access to the JSE.
The types of AMETFs you can invest in may be as varied as unit trusts funds. The AMETFs investment universe may be classified like any other collective investment scheme.
Currently many AMETFs listed in South Africa are classified as global funds because they invest at least 80 percent of their assets outside South Africa.
However, they can be bought or sold in rands, without using any foreign allowance in terms of exchange control regulations.
The advantage for asset managers who launch their funds as AMETFs is that these funds are regarded as "inward listed" foreign securities under South African exchange control rules.
This means the manager is not constrained by exchange controls that limit how much of their total assets under management can be invested in offshore markets. These exchange controls can at times result in global unit trust funds being closed to new investments (a soft close). AMETFs will not face the same obstacles.
A number of other AMETFs launched in South Africa are fixed income funds that invest in parts of the fixed income market, such as private credit markets, that do not have indices that can be tracked.
The AMETF structure is also being used by managers who believe they can enhance the performance of an index by making certain adjustments to the index portfolio – this is known as enhanced indexation.
AMETFs are likely to cost more than passively managed ETFs because actively managed funds are managed by skilled fund managers who are supported by research analysts.
An AMETF that is also offered as a unit trust fund may be cheaper than the equivalent fund offered to you, as a retail investor, because there are no fee classes as there are with unit trust funds.
AMETF are required to publish the Total Expense Ratio (TER) of the fund each day showing the costs incurred within the fund, including the asset management fee.
AMETF investors will also potentially incur trading platform fees.
South African residents investing in AMETFs will be taxed in the same way that investors in unit trusts and other collective investment schemes are taxed.
Interest earned in the fund will be declared to the South African Revenue Service and attract income tax if your total interest earnings for the tax year exceeds the interest exemption.
The fund will withhold and pay dividends tax on any dividends it distributes to you.
When you sell your investment, you may be liable for capital gains tax (CGT) on any gains made – income tax is applied to taxable capital gains for the tax year above the annual capital gains tax exemption.
AMETFs can be included in a tax-free savings account as long as the fund does not charge any performance fees and complies with other requirements for these accounts.
An actively managed fund may outperform or underperform its benchmark. The risk you as an investor take is that the fund manager makes the wrong call when selecting 
securities or when to buy or sell them, or its allocation to different regions, industries or asset classes.
On the other hand, an actively managed fund may be managed to minimise the risk of market falls, to which you are fully exposed when you invest in an index in which securities are weighted according to their market capitalisation.
As an investor, you need to consider the manager’s investment approach and its track record.
When you invest in an AMETF, the fund may not have a minimum investment amount requirement, but the stockbroker or online stockbroker you use may or may not have a 
minimum investment amount or trading amount. Some online stockbrokers have no minimum investment amounts.
Many unit trust platforms, however, require certain minimum investments before you can invest or top up investments.
