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The strong performance of large US tech shares over the last few years is well known, and local unit trusts that had exposure to them have delivered good results for their investors.
A quick look at things since the beginning of this year shows that some of these tech stocks are still behind the returns reported by unit trusts. The other driver behind better unit trust yields is gold shares, which few would have expected.
Unit trusts are long-term investments, and it is thus difficult – and fraught with danger – to compare their performance over a period of a few months. Unit trusts also have different aims and risk profiles.
That said, looking at the top unit trusts discloses some interesting trends.
Fund performance by different investment sectors confirms that international funds continue to do well.
According to the classification of unit trusts by the Association for Savings and Investment South Africa (Asisa), global general equity funds achieved returns of around 8 percent on average since the beginning of 2024.
In contrast, SA general equity funds overall reported a negative return of slightly more than minus 1 percent since the start of the year.
And the worst sector was SA financial equity funds, which is down 6,4 percent this year as investors continue to shun local financial shares –despite assurances from analysts and fund managers that SA banks and financial institutions offer outstanding value at current prices.
The continued strong rise in the share price of Meta Platforms boosted the fortunes of several of the best-performing general unit trusts.
Meta – owner of Facebook, Instagram, Threads and WhatsApp – has increased by 50 percent on US stock exchanges since the start of the year.
It was the best-performing share in Visio Fund Management’s Visio BCI Shariah Equity Fund, which is leading the pack of general unit trusts this far into 2024.
It has delivered a year-to-date return of close to 7 percent.
The fund also got a nice kick from its holding in Gold Fields, which increased by nearly 24 percent since 2 January. Microsoft also helped, advancing nearly 15 percent in dollar terms.
The second-best general unit trust is the 36One BCI Equity Fund, which chalked up a gain of 6,2 percent. Meta helped here too, as did the gain in Naspers’s share price, based on the slight recovery in Tencent’s share price.
What is interesting about 360One’s general portfolio is its quite high exposure to SA banks.
The latest fact sheet shows that five banks were among its largest 10 holdings.
At the end of February, 4,6 percent of the portfolio was invested in Absa and 4,1 percent in FirstRand. Nedbank and Standard Bank accounted for 8 percent of the portfolio with 4 percent each, and exposure to Investec came to 3,2 percent.
That totals 20 percent of the portfolio.
Unfortunately, only Nedbank has advanced since the start of the year – and its gain of 9,5 percent was wiped out by declines that hit FirstRand (down 12,5 percent), Standard Bank (11 percent) and Absa (nearly 8 percent).
The 36One fund managers are obviously betting on a recovery in bank shares.
Mining
Methodical BCI Equity Fund, number three in the general equity fund rankings since January, has the increase in the gold price to thank for keeping investors happy.
The best performers among its top 10 holdings were Harmony, with a gain of more than 47 percent since the beginning of January, and AngloGold, which ran 28 percent.
It also had some Gold Fields shares, which advanced nearly 24 percent, and it bought some exposure to physical gold by sticking more than 3 percent of its portfolio into the NewGold EFT. The fund’s exposure to gold and gold shares tops 15 percent. Moneyweb
Online Reporter