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etfSA.co.za monthly South African ETF, ETN and index tracking product performance survey

07 November 2011 Mike Brown, Managing Director, etfSA.co.za
Mike Brown

Mike Brown

NewGold ETF continues to dominate the returns of products that track the performance of indices or assets. In fact, the most recent performance survey from ASISA, of all unit trusts, ETFs and Collective Investment Schemes in South Africa, indicates that NewGold would be the best performing retail fund in South Africa for the 3 month, 6 month, 1 year, 2 year and 5 year periods, with total returns outperforming any other product.

As the index tracker data series grows, some interesting features in the performance of comparative products are emerging.

  • The BIPS Top 40 ETF regularly outperforms the Satrix Top 40 ETF for instance. As BIPS Top 40 has a lower cost structure (TER) than Satrix Top 40, this is to be expected.
  • Both Satrix DIVI ETF and the Satrix RAFI 40 ETF are index products, that track specific investment parameters (styles), rather than purely prices. There are proponents of both products – some prefer the RAFI technology which looks at four different accounting criteria over a 5 year period, and some favour the DIVI technology, which only looks for future dividend prospects. There is little to choose between the two products on performance data. Satrix DIVI shows better medium term performance, with Satrix RAFI better in the short term. But they both show superior performance to most other index tracking products, so are gaining in popularity.
  • The Rand Hedge products, that benefit from the recent depreciation of the rand, are showing market leading performance in recent times. These include many of the commodity based ETNs and certain Deutsche Bank DBX Tracker ETFs, which offer access to global stockmarket indices. The fact that these products trade on the JSE, are easily accessible, transparent and very competitive in costs, relative to other foreign based products, helps to general interest. For all products surveyed up to one year, many such rand hedge ETFs/ETNs provide superior performance and, if the rand remains under pressure, might continue to be attractive investment options.

Best Performing Index Tracker Funds – 31 October 2011

(Total Return %)*

Fund Name

Type

5 Years (per annum)

NewGold

ETF

24,25%

Prudential Property Enhanced

Unit Trust

15,90%

Satrix INDI 25

ETF

15,33%

3 Years (per annum)

Satrix DIVI

ETF

23,83%

Prudential Property Enhanced

Unit Trust

22,67%

NewGold

ETF

22,23%

2 Years (per annum)

NewGold

ETF

28,83%

Satrix INDI 25

ETF

20,84%

NewFund eRafi INDI 25

ETF

17,92%

1 Year

Standard Bank Silver-Linker

ETN

59,38%

NewGold

ETF

43,67%

Standard Bank Gold Linker

ETN

43,32%

6 Months

NewGold

ETF

32,78%

Standard Bank Gold-Linker

ETN

32,64%

DBX Tracker MSCI Japan

ETF

13,45%

3 Months

Standard Bank Gold-Linker

ETN

23,46%

NewGold

ETF

24,01%

DBX Tracker MSCI USA

ETF

13,97%

1 Month

DBX Tracker MSCI EuroStoxx 50

ETF

14,52%

NewFunds eRAFI RESI 20

ETF

13,50%

Source: Profile Media FundsData (31/10/2011)

* Includes reinvestment of dividends.

The full etfSA Performance Survey is attached. The etfSA Performance Survey measures the total return (price changes plus reinvestment of dividends) for index tracking unit trusts and Exchange Traded Funds (ETFs) available to the retail public in South Africa. The performance table (attached) measures the 1 month to 5 years total return compared with the benchmark index returns (including reinvestment of dividends). Note, as the FTSE/JSE calculates the index without taking into account any brokerage or other transaction costs, index tracking products will typically underperform the index because of their transaction and other running costs.


 

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