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File Image: IOL

How your unit trusts performed to the end of June

By Martin Hesse Time of article published Jul 28, 2021

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The second quarter saw something of a slowing of fortunes for unit trust investors as the JSE/FTSE All Share Index levelled out, albeit at the record highs of around 67 000 points it attained in the first quarter.

Resources shares, which gave the local share market such a boost last year, lost ground in the second quarter, pulling down the performance of equity-based unit trust investments. On the other hand, the local listed property sector had an excellent run during the quarter to June 30, rising by about 11%. (All data has been supplied by ProfileData.)

Let’s look at the broader collective investment scheme categories:

Equity funds

South African general, large-cap and industrial funds were down for the quarter, but one sector, financials, was up by 5.4%.

Over 12 months to the end of June, the best performance was in funds focused on small- and mid-cap shares (up by about 45.5%, on average). Resources funds were up by over 43.7% and financials by 31.4%. General equity funds rose, on average, by 25.4%, with individual fund performance ranging from 8.9% to 51.4%.

Multi-asset funds

South African high-equity multi-asset funds were almost flat for the quarter, averaging 1.4%. Flexible funds were not much better, at 1.6%, while the low-equity and medium-equity funds delivered 2.2% and 1.8% respectively, on average.

Over 12 months, performance remained strong: high-equity funds delivered 17.2% on average, but with a wide variance: performance ranged from 0.9% to 40.5%. Flexible funds delivered 20.2% on average, low-equity funds 10.8%, and medium-equity funds 14.0%

Interest-bearing funds

Money market funds delivered 1.0% for the quarter and 4.1% for the 12 months to the end of June. This means that, in real terms, anything in a money market fund is now losing money, as inflation is about 5%.

Funds invested in short-term interest-bearing instruments delivered 1.3% for the quarter and 5.4% for the 12 months, roughly in line with inflation.

However, longer-term bonds performed strongly, as indicated by the average performance of the interest-bearing variable-term subcategory: 6.7% for the quarter and 13.5% for the 12 months.

Listed property funds

Unit trust funds invested in property companies have shown a steady recovery since their lows of last year, but they are still far off the highs this subcategory reached in 2017: the South African Property Index reached a peak of 690 points in December 2017; it plummeted to below 200 points as the pandemic hit, in March last year, and at the end of June 2020 had climbed to 315 points. The funds in this subcategory delivered 10.6% for the quarter and 24.0% for the 12 month to the end of June.

Global and worldwide funds

Funds denominated in rands but invested mostly in overseas markets are subject to the volatile rand price, which strengthened from R14.63 to R13.72 to the US dollar during the quarter. Worldwide flexible funds, which have the freest mandate of any fund subcategory (they can invest anywhere, including in South Africa, in any proportions) delivered 1.9% for the quarter and 12.8% for the 12 months. Global general equity funds, another popular subcategory (they invest in equities in offshore markets) delivered 2.2% and 15.2% respectively, on average. Over the 12 months, the performance of individual global equity funds ranged from -1.6% to 48.1%, with funds heavily invested in the big global tech stocks leading the way.

Unit trust company rankings

Ninety One remains at the head of the pack in the domestic company rankings, according to the PlexCrown ratings of their qualifying funds. The ratings are based on risk-adjusted performance over a five-year period, in this case to the end of June. Each fund gets a PlexCrown rating out of five, and the weighted average of the company’s funds gives an overall rating for the company. Ninety One has 4.16 PlexCrowns, followed by H4 Collective Investments with 3.67 PlexCrowns and Mi-Plan with 3.66 PlexCrowns.

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Of the offshore companies permitted to market their funds in South Africa, Fundsmith leads with 5.00 PlexCrowns, followed by Stanlib’s offshore division (4.50 PlexCrowns) and T Rowe Price (4.33 PlexCrowns).


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