Megan Fraser

August 2025

Craig Foster is a documentary filmmaker, naturalist, and founder of the Sea Change Project. He’s probably best known for the Academy Award–winning 2020 film My Octopus Teacher, which brought global attention to the incredible marine life of the Cape’s kelp forests.

Recently, I was chatting with my cousin – who, incidentally, published the supporting book by the same name – and he shared the incredible experience of snorkelling with Craig Foster. They dived together at one of Craig’s favourite spots: a secluded stretch of kelp forest in False Bay, just outside Cape Town. Now, keep in mind that Craig dives without a wetsuit or SCUBA gear – just fins, a mask, and a weight belt and he expected my cousin to do the same. With an average water temperature of 15° it’s not exactly what one would consider balmy. My cousin tried a few dives on his own first, and was singularly unimpressed and, frankly, a little bored by the lack of visual entertainment. It was cold and gloomy with no action in sight – he felt like the average 6-year old in the back seat of the car during a trip to the Kruger.

Then Craig spent some time with him, coached him, gave him some pointers of what to look out for, helped him to open his mind, guided his thinking and expectations…and a whole different world opened up. Suddenly the kelp forests were teaming with life and movement, he was filled with wonder and mystery and on high alert for Nemo and Ariel…same water, same mask, same chilly temperature…but a completely different experience. All it took was a shift in mindset and someone to show him where (and how) to look.

The movie, and the book that supported it, caught the attention and imagination of a global audience and the documentary became a viral hit. Although Netflix does not release viewer data, following its release it was declared a global success, among the top 10 most watched documentaries in Israel, South Africa and Australia. Amy Schumer recommended it to her 10.2 million Instagram followers.

Suddenly everyone clearly understands the distinction between octopus and calamari…and that it is not cool to eat the octopus.

It can be challenging to greet new information with an open mind. Considering the pace and the quantum of information flowing at us constantly, even the most hardy among us become fatigued occasionally…yet somehow this release made waves. Some of the reasons for this might be:

  • Emotional storytelling;
  • Stunning cinematography;
  • Universal themes such as the connection between humans and nature, the fragility of ecosystems, and the importance of conservation that resonate with a wide audience;
  • Timing: released on Netflix in September 2020, a time when many people were staying at home due to the COVID-19 pandemic, the film provided a welcome escape from the stresses of daily life and offered a unique perspective on the natural world.

So, as a provider of rules-based investment philosophy, how do we create the same sea-change in investors’ minds?

What Gets in the Way of New Thinking?

When it comes to embracing something unfamiliar – like index tracking – most resistance isn’t about facts. It’s about unlearning. As Richard Rohr says, “transformation is more often about unlearning than learning.”

So, what do we need to unlearn?

Often, it’s the comfort of the familiar. We trust what we know, even if what we know is outdated. There’s also cognitive bias – the tendency to stick with long-held beliefs, even in the face of better evidence.

Sometimes, it’s fear: fear of getting it wrong, of losing control, or missing out on the next “big thing.” Active investing, after all, comes with stories, suspense, and the adrenaline rush of chasing the new ‘new’ thing. In contrast, index investing can seem like a bit of a snooze-fest – no plot twists, no hero’s journey, just steady, consistent returns.

And that’s the point. Trackers aren’t built to dazzle – they’re built to deliver the market. Not more, not less. And while it’s tempting to believe that hand-picking stocks or backing a star fund manager will lead to better returns, the evidence says otherwise: consistent outperformance is rare, and hard to sustain.

“Take a simple idea, and take it seriously.”

Charlie Munger

The graph below illustrates this reality:

But let’s go beyond performance…

Index tracking, while not as fascinating as cephalopods, has a number of redeeming features. Fees, consistency and liquidity immediately come to mind.

The impact of costs on an investment goes beyond simply comparing annual management fees or Total Expense Ratios. This graph shows the erosion effect of fees on an investment. If you invested R1000 once off for 50 years, you will sacrifice 22% of your maturity value if you invested in a savings plan with costs of 0.5% per annum, and as much as 72% if you’re paying an annual fee of 2.5%. Be wary of hidden costs and include all costs in your calculations – the total cost needs to be taken into account! Including indexation in a portfolio can help reduce costs to an absolute minimum as index trackers usually have lower fees than actively managed funds.

Another factor that should be considered is the consistency of a fund’s performance – even a broken watch is right twice a day. Being invested in a highly volatile fund, where performance swings between dramatic highs and lows, can be emotionally draining and, over time, financially challenging. An index tracker will avoid the feast or famine scenario – your returns simply mimic those of the market. It might not be fascinating and fun, but it is dependable and over the longer term, you reap the rewards. This ‘sleep-well-at-night’ factor beats any melatonin supplement.

And a final factor is liquidity. Overall, the liquidity of index funds can be a significant advantage for investors, making it easy to buy and sell as needed while also keeping transaction costs under control.

We don’t view indexation as a panacea for equity investing. While we wholeheartedly endorse the role of active managers, we believe the most effective approach is to pair a core investment in an index fund with a carefully selected group of niche active managers.

With nearly thirty years of experience in index tracking, Gryphon brings a deep understanding of the discipline and its long-term benefits. We’ve consistently seen how a well-constructed, rules-based approach combined with low costs and transparency can meaningfully impact investment outcomes for clients.

“The difficulty lies not so much in developing new ideas as in escaping from old ones.”

John Maynard Keynes