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Overview of unit trust returns for the fourth quarter 2009

08 January 2010 Plexus

Global economic and investor sentiment gained further traction in the fourth quarter of 2009 as global liquidity concerns faded fast. The risk appetite of global investors, as measured by the bond yield spread between emerging market bonds and US bonds, continues to shrink. Evidence of sustained global economic recovery is increasingly visible, especially in increasing demand and the resultant rising commodity prices.

During the quarter industrial metal prices, as measured by the Economist Metals Index, rose by more than 16%, the price of platinum advanced by 13,3% and the Brent spot oil price rose from US$66 to US$77 per barrel.

The FTSE/JSE Resources Index was again the belle of the investment ball in the fourth quarter and returned 16,7% on a total return basis. By 31 December 2009 the FTSE/JSE Resources Index had climbed by a massive 82,9% since its low in November 2008, making it the top-performing FTSE/JSE sector over one year with 35,4%.

Domestic equity resources and basic industries (excluding gold and precious metal funds) was the best-performing unit trust subcategory, with an average return of 12,8% for the quarter. Domestic equity resources and basic industries also topped the charts for the year with a total return of 37,9%.

Over three years, domestic fixed interest money market funds had the edge on resources funds, with 10,1% per year as opposed to 9,9%. Over five years, resources funds (excluding gold and precious metal funds) continue to top the charts, with an average total return of 25,1% per year.

Over the past quarter, international equities continued to build on the recovery that commenced in the second quarter of 2009, adding 3,7% to global market capitalisation. Emerging markets put in a stellar performance with 8,2% in US dollar terms. Although the global equity market as measured by the MSCI World Index is up by a massive 70% from the low in March 2009, it is still more than 30% below the peak set in October 2007.

The broad South African equity market, as measured by the FTSE/JSE All Share Index, returned 11,5% for the quarter with dividends and income reinvested, taking the total return for the year to 32,2%. The equity market is up 54,1% from the low in March 2009, but still 17% below the peak set in May 2008.

The strong showing in the fourth quarter of 2009 was not limited to resources: the FTSE/JSE Growth and Value indices increased investors’ wealth by 13,9% and 9,0% respectively. The financial-related sectors of the market also enjoyed a reasonable fourth quarter with the FTSE/JSE Financial Index returning 6,5% and the FTSE/JSE Listed Property Index yielding 4,1% with income reinvested.

The superior performance of resources funds was closely followed by the worldwide equity varied specialist and domestic equity large cap subcategories – with total returns of 12,0% and 10,3% respectively – and domestic equity growth (8,4%).

The South African bond market had a quiet quarter. The All Bond Index returned a paltry 1,1% (with interest income reinvested) during the quarter as the yields on long-dated bonds crept higher in unison with the global trend. Investors through the South African rand in foreign bonds did not enjoy a good quarter as global bond prices started to retreat at a time when the rand was strengthening. The foreign fixed interest bond subcategory was therefore the worst-performing subcategory during the quarter with minus 2,3%.

The best-performing fund over the last quarter was the RMB Resources Fund with a return of 15,7%, followed by the Investec Commodity Fund with 15,2%. The worst-performing fund was the STANLIB Small Cap Fund with minus 5,8%.

Over 12 months the RMB Resources and PSG Alphen Growth Fund were the best-performing funds with 53,6 and 43,5% respectively. The worst-performing fund was the Investment Solutions US Dollar Cash Feeder Fund with minus 21,3%.

Over three years the Cadiz Equity Ladder Fund tops the charts with 22,2% p.a. Over five years resources funds top the charts, with Old Mutual Mining and Resources Fund delivering the best performance at 29,2% p.a.

The tables below give an overview of:

a) the best and worst sectors,

b) the best and worst funds, and

c) sector performance for the three months ended 31 December 2009.

Best and worst sectors

 

1 month

Best

%

Domestic--Equity--Value

4.01%

Domestic--Equity--Industrial

3.76%

Domestic--Equity--Resources & Basic Industries

3.71%

Domestic--Equity--Growth

3.66%

Domestic--Equity--Smaller Companies

3.59%

Worst

Worldwide--Equity--General

0.20%

Gold and Precious Metals

0.00%

Foreign--Asset Allocation--Flexible

-0.09%

Foreign--Fixed Interest--Varied Specialist

-2.17%

Foreign--Fixed Interest--Bond

-3.44%

3 months

Best

%

Domestic--Equity--Resources & Basic Industries

12.80

Worldwide--Equity--Varied Specialist

11.97

Domestic--Equity--Large Cap

10.27

Domestic--Equity--Value

8.57

Domestic--Equity--Growth

8.43

Worst

Domestic--Fixed Interest--Money Market

1.79

Domestic--Fixed Interest--Bond

1.09

Foreign--Asset Allocation--Flexible

0.24

Foreign--Fixed Interest--Varied Specialist

-1.75

Foreign--Fixed Interest--Bond

-2.25

6 months

Best

%

Worldwide--Equity--Varied Specialist

29.51

Domestic--Equity--Resources & Basic Industries

28.08

Domestic--Equity--Value

27.12

Domestic--Equity--Large Cap

26.04

Domestic--Equity--Growth

23.90

Worst

Domestic--Fixed Interest--Income

4.11

Domestic--Fixed Interest--Money Market

3.86

Domestic--Fixed Interest--Bond

3.55

Foreign--Fixed Interest--Bond

1.35

Foreign--Fixed Interest--Varied Specialist

-3.04

12 months

Best

%

Domestic--Equity--Resources & Basic Industries

37.85

Worldwide--Equity--Varied Specialist

33.80

Domestic--Equity--Value

33.28

Domestic--Equity--Financial

33.02

Domestic--Equity--Large Cap

31.05

Worst

Foreign--Equity--General

4.74

Domestic--Fixed Interest--Bond

-0.42

Foreign--Asset Allocation--Flexible

-3.70

Foreign--Fixed Interest--Bond

-11.30

Foreign--Fixed Interest--Varied Specialist

-16.05

Three years

Best

% per year

Domestic--Fixed Interest--Money Market

10.05

Domestic--Equity--Resources & Basic Industries

9.92

Domestic--Real Estate--General

9.36

Domestic--Fixed Interest--Income

9.25

Domestic--Fixed Interest--Varied Specialist

8.74

Worst

Worldwide--Equity--General

1.07

Foreign--Asset Allocation--Flexible

-0.17

Domestic--Equity--Smaller Companies

-1.15

Foreign--Equity--General

-4.92

Foreign--Equity--Varied Specialist

-9.27

Five years

Best

% per year

Domestic--Equity--Resources & Basic Industries

25.08

Domestic--Equity--Large Cap

19.48

Domestic--Real Estate--General

18.39

Domestic--Equity--Value

17.99

Domestic--Equity--Industrial

17.40

Worst

Foreign--Asset Allocation--Flexible

7.68

Foreign--Fixed Interest--Varied Specialist

7.06

Foreign--Equity--General

6.94

Domestic--Fixed Interest--Bond

6.88

Foreign--Equity--Varied Specialist

5.17

 

Source: Profile Media

 

 

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