The FTSE/JSE All Share Index (Alsi) delivered a miserable 3.17-percent return for the year to the end of March and general equity funds under-performed the index: the average return was just 0.68 percent.
But the performance of local markets was stronger over the quarter to the end of March. The Alsi returned 3.87 percent over the quarter alone, led by gains in resource shares. The FTSE/JSE Resi Index gained 13.18 percent and the FTSE/JSE Financial Index was up 6.22 percent.
In their quarterly market and economic review, economist Sanisha Packirisamy and Herman van Papendorp, the head of asset allocation at Momentum, say the Financial Index benefited from the strengthening in the rand, despite the deteriorating economic situation.
The performance of the resources and financial sectors relative to the industrial sector over the first quarter was an about-face on how these indices performed in 2015 and earlier this year, when the market was buoyed by industrial shares – two counters in particular – and weighed down by resources.
The strong performance by resource shares over the first quarter was buoyed by value funds that took large positions in these shares. The Investec Value Fund, with a return of 23.76 percent, was the top performer over the year to March 31 in the South African general equity sub-category.