Financial markets to the end of September were highly volatile, with the FTSE/JSE All Share Index (Alsi) fairly far off its record first-quarter high of over 77 000 points. The index began the third quarter at 66 223 points, rose to about 71 500 in the middle of August, before embarking on a stomach-churning rollercoaster ride, ending the three-month period on 63 726 points. While the index was down by about 3.8% for the quarter, it was down a more alarming 15.6% over six months, but virtually flat (down 0.86%) over 12 months, according to ProfileData, who supplied all market data referred to in this article.
The total-return version of the Alsi (which measures returns with dividends reinvested) was up 3.55% over the 12-month period, showing that dividends added over 4% to equity returns.
Breaking the share market down into its major sectors, financials were down 4.22% for the quarter and down 0.55% for the 12 months to the end of September; industrials were down 1.27% for the quarter and down 3.36% for the 12 months; and resources were down 2.15% for the quarter but showed a healthy positive return of 10.39% for the 12 months.
Annual returns of unit trusts and exchange traded funds in the large South African general equity category ranged from minus 9% to over 21%. The arithmetic average of this category over 12 months was 2.14%. (Note that these figures are net returns, after investment costs – but not advisory costs – have been deducted.)
Turning to South African multi-asset funds in the popular high-equity category, the worst-performing fund was down a staggering 22.56% over 12 months, while the top-performing fund returned a positive 10.28%. The average fund returned just 0.26%.
In the interest-bearing categories, money-market funds averaged 4.43% for the 12 months to the end of the third quarter, short-term funds averaged 5.05%, and variable-term funds (those generally invested in longer-term bonds) averaged 2.47%. Consumer Price Index inflation stood at 7.6% in August, according to Statistics SA.
The South African Listed Property Index continues to come under strain. It was down 3.54% for the quarter and down 8.75% for the 12 months to the end of September. Unit trust funds specialising in the listed property market were, unsurprisingly, all down over 12 months, ranging from negative 1.94% to negative 12.8%.
Investors with money in rand-denominated offshore feeder funds had mixed fortunes over the quarter. Global equity funds averaged 0.88% for the quarter, but were down 9.43%, on average, over 12 months to the end of September. These results (in rand terms) would have been worse had the rand not weakened considerably against the US dollar.
PLEXCROWN RANKINGS
PSG Asset Management has shot up to No. 1 position in the local unit trust management company PlexCrown rankings, overtaking Ninety One, the holder of the Raging Bull Award for the Best South African Manager and which, until the end of the second quarter, had retained its lead in this fiercely contested race. PSG had nine qualifying funds with a weighted average of 3.965 PlexCrowns. Four of the nine funds (the PSG Diversified Income Fund, PSG Income Fund, PSG Balanced Fund and PSG Stable Fund) achieved the top rating of five PlexCrowns. (The PlexCrown rating system rates funds on risk-adjusted performance over five years.)
Ninety One (until a couple of years ago known as Investec Asset Management) had 18 qualifying funds, which scored a weighted average of 3.735 PlexCrowns. Two of the funds managed five PlexCrowns at the end of the third quarter: the Ninety One Global Multi-Asset Income Feeder Fund and Ninety One High Income Fund.
In third place is Boutique Collective Investments (BCI), with 17 qualifying unit trust funds scoring a weighted average of 3.577 PlexCrowns. Two of BCI’s funds, the BCI Flexible Fund and the 3B BCI Stable Fund of Funds, scored five PlexCrowns.
Among offshore managers with funds in foreign currencies that are licenced by the Financial Sector Conduct Authority to be marketed in South Africa, the top three are Credo, Nedgroup Investments and Artisan Partners.
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