June 2018 – etfsa.co.za monthly South African ETF, ETN and unit trust passive index tracking performance survey

Mike Brown, Managing Director of etfSA.co.za.

The Performance Survey for the period ended 29 June 2018, is attached. The Survey measures total investment returns for all 92 JSE listed ETFs/ETNs, and 39 index tracking unit trusts for periods of one month to ten years. The summary table of the best performing passive index tracking products is shown on page 1. The total return performance of each Domestic Exchange Traded Fund is shown on pages 2-4; Foreign Exchange Traded Funds on pages 5-9; Foreign ETNs on page 6; Commodity ETFs & ETNs on page 7; Currencies on page 8; and Index Tracking Unit Trusts on pages 9-11.

The latest Performance Survey shows that commodity based Exchange Traded Products dominate the top performing funds for periods of 3 years or less. However, in the past 6 months, there has been a perceptible recovery in both foreign and local equity returns, helped by the recent rand weakness in many cases. Bonds and local listed property ETFs have, however, performed badly, reversing the trend of the past few years, for such asset classes to provide superior returns.

Index tracking ETFs generally perform better than similar index tracker unit trusts and show far less volatility in total returns over various time periods. This can be attributed to the requirement for JSE listed ETFs to exactly replicate the index, which is not a requirement for non-listed index trackers. Using quantitative methods to track indices without full replication, which can be the case for tracker unit trusts, can produce mixed results.

To see full performance survey click here.