Johannesburg — FINANCIAL journalists fortunately don't usually earn enough to have anything spare to invest, which could create conflicts of interest. Most financial publications restrict or force financial journalists either to refrain from investing in individual shares or to acknowledge their investments in a company about which they write, or invest only in passive investments.

Hence, my almost ridiculously small investments are invested in Satrix, which sent out an interesting newsletter this week.

In 2000, investors around the world had committed 40bn of their assets to a relatively new way of investing, exchange-traded funds. By the end of last year, 10 years later, they had increased their commitment to exchange-traded funds to over 1-trillion.

It also said individual investors in the US have withdrawn 350bn from actively managed funds over the past two years and allocated 500bn to passively managed funds. According to a Boston research company, assets under management of passively managed US mutual funds will grow by 50% by 2014.

Satrix, a passive fund, suggests this is a "phenomenal vote of confidence". This may be true, but I wonder how much of this is a result of the financial crisis. When markets are rising, surely, you need stock pickers to help you get to the stocks with good prospects, and travelling with the market will hold you back. When markets are declining, security is the big issue, so there is a premium on diversifying as much as possible.

Still, it is amazing how difficult it is to beat the market consistently, even with centuries of investment knowledge now at our disposal. Satrix has been a great innovation by the JSE, and I for one am thankful for the ability to invest extremely small sums cheaply on the stock market.