Only four local equity funds have been top performers over the past five years

2022/01/12 15:30:00

The argument that ‘the market wasn’t in our favour’ should never go unscrutinised.

Moneyweb, Equityfunds

The resurgence in value last year after a long period of underperformance meant that many of 2021’s top performing unit trusts were recovery stories. Moneyweb EquityFunds

The argument that ‘the market wasn’t in our favour’ should never go unscrutinised.

The resurgence in value last year after a long period of underperformance meant that many of 2021’s top performing unit trusts were recovery stories.For the five years from the start of 2016 to the end of 2020, the average return from all South African domiciled unit trusts was just 4.11 January 2022 - 08:55 Jessie Pang and Marius Zaharia Carrie Lam.Competitions POLITICS ","category_class":"child-of-news","time_ago":"1 hour ago","premium":true,"gallery":false,"excerpt":"Sisulu contested Ramaphosa at Nasrec, but lost along with five other presidential candidates.

Of the 20 best performing general equity funds in 2021, 11 were bottom quartile in the category for 2020. It is notable that very few funds were top performers across both years. Last year, it jumped to 18. In fact, just six South African general equity portfolios were top quartile in both 2020 and 2021. It comes as the Chinese-ruled city has seen some local transmissions of the Omicron coronavirus variant after three months of no local coronavirus cases at the end of last year. That in itself is a commendable achievement by these managers, as the market drivers over these two periods were very different. While this headline figure is really only of academic interest, since it includes everything from money market to global equity funds, it does illustrate how much better returns in general were for local investors in 2021. It would have required an expectation of how much things might change, a willingness to be flexible, and, particularly in 2021, an inclination to invest away from the benchmark.citizen.

However, four of these funds took this level of consistency one step further: they are top quartile performers over the past five years as well. At the same time, 545 funds – 42. Children over five will be able to get the Chinese-made Sinovac vaccine, Lam said. Source: Morningstar This list is striking for two reasons. The first is that it is so short. By comparison, just 68 of 1 088 funds – 6% – gained more than 20% in 2019. There are 120 funds in this category with track records of at least five years, so this is just 3. Separately, Bloomberg News said Hong Kong’s international airport was set to ban transit by passengers from 150 designated high-risk places from January 15 to February 14, citing the unnamed sources.3% of them. Read: Eight local unit trusts that caught our eye [last] year Local equity funds are back in favour Top-performing unit trusts in SA over the past decade The magnitude of the change in fortunes is perhaps best illustrated by the performance of funds in the Asisa (Association for Savings and Investment) South Africa multi-asset high equity category.co.

That is a vanishingly small percentage of managers to have shown this level of consistency. Of course one might argue that, given how markets have behaved over the past five years, if managers were true to their philosophy then it would make sense for them to underperform somewhere.4%, according to Morningstar. Lam did not mention new air transit rules during her press conference. By implication, however, that argument would suggest that the managers of these four funds somehow didn’t stick to their philosophy. That would be an extremely bold statement to make in the case of a firm as stable as M&G.4%. It would also do a disservice to the managers on the other three funds, all of whom have been managing money for decades. Less than 75% of eligible people have had a first dose, while just under 70% have had a second one.za\/wp-content\/uploads\/2022\/01\/ANC-cadre-deployment-DA-300x200.

Luck will always play a role, but the managers of these portfolios are all experienced enough to have long-since established their investment DNA. Strength on the JSE The significant difference has been in the returns available from the local stock market. None of them are coming up with ideas on the fly. The ‘stick to your knitting’ argument therefore only goes so far.5%. There have since been more than 40 local transmissions of the Omicron variant, with more than 4,000 people considered close contacts sent into government-mandated quarantine, Lam said. Clearly, there has been room for managers to be both consistent in their approach, and in the outcomes they have delivered over this period. But only very few have got it right.2%.jpg","category":".

The gain without the pain The second point to note is that it is almost certain that these are not the four funds that any local fund selector would have named if the question had been posed as to which four equity portfolios were most consistent over the past five years. Lam said a disciplinary investigation was still going on into the behaviour of 13 senior government officials who attended a birthday party for a delegate to China's legislature. It is likely that the 36One equity fund managed by Citywire A-rated Evan Walker and + rated Cy Jacobs would have been on many lists.3%. The performance of M&G’s portfolio under Chris Wood and Yusuf Mowlana is also unlikely to have surprised many. But the other two funds are not widely held or recognised. That is 28% of the unit trusts with track records this long. “This is the most unfortunate event because of the large number of people involved,” Lam said, adding the officials should have complied with her appeal for people to avoid large gatherings. The Investec Wealth & Investments BCI Dynamic Equity fund, managed by Citywire + rated Barry Shamley has only R848 million in assets under management.

The Counterpoint SCI Value fund has just R380 million. Two of those were index trackers, tracking the FTSE/JSE Dividend Plus index. The performance of the Counterpoint portfolio is particularly interesting. For most of this period, it was managed by Sam Houlie and Raymond Shapiro. After average returns of 6% in 2020, funds in this category returned on average 6. Following the firm’s merger with RECM and Houlie’s subsequent departure from Counterpoint, Piet Viljoen is now in charge. It may be that there has been some extreme good fortune in that the timing of portfolio manager changes has coincided with shifts in market dynamics. That is below the strong performance in years like 2019 and 2016, but is not significantly below the five-year average annualised return of 7.

This may be part of why the fund has got some big calls right, such as the decision to move entirely out of offshore equity and thus benefit more fully from the bounce on the JSE. But this portfolio is nevertheless a very rare example of a value fund that has not been hugely volatile. Notably, 19 of the 109 funds in this category – 17. It did underperform its sector in 2017, but according to Morningstar, it has been top quartile in each of the past four years. In 2020, when most value managers struggled, the fund was the fourth best performing equity portfolio in South Africa. That is in line with this category’s five-year numbers. This illustrates why the argument that ‘the market wasn’t in our favour’ should never go unscrutinised.

If a value fund has performed this well across these different market periods, that shows there can be more to any style-oriented investment philosophy than just waiting for the market to help you out.8% – show annualised returns of 8% or more. Fund selectors should bear that in mind the next time they get that hoary excuse from a manager. Patrick Cairns is South Africa Editor at Citywire, which provides insight and information for professional investors globally. This was slightly ahead of the returns from recent years. This article was first published on Citywire South Africa here, and republished with permission. jQuery(document).3%.

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The resurgence in value last year after a long period of underperformance meant that many of 2021’s top performing unit trusts were recovery stories.For the five years from the start of 2016 to the end of 2020, the average return from all South African domiciled unit trusts was just 4.11 January 2022 - 08:55 Jessie Pang and Marius Zaharia Carrie Lam.Competitions POLITICS ","category_class":"child-of-news","time_ago":"1 hour ago","premium":true,"gallery":false,"excerpt":"Sisulu contested Ramaphosa at Nasrec, but lost along with five other presidential candidates.

Of the 20 best performing general equity funds in 2021, 11 were bottom quartile in the category for 2020. It is notable that very few funds were top performers across both years. Last year, it jumped to 18. In fact, just six South African general equity portfolios were top quartile in both 2020 and 2021. It comes as the Chinese-ruled city has seen some local transmissions of the Omicron coronavirus variant after three months of no local coronavirus cases at the end of last year. That in itself is a commendable achievement by these managers, as the market drivers over these two periods were very different. While this headline figure is really only of academic interest, since it includes everything from money market to global equity funds, it does illustrate how much better returns in general were for local investors in 2021. It would have required an expectation of how much things might change, a willingness to be flexible, and, particularly in 2021, an inclination to invest away from the benchmark.citizen.

However, four of these funds took this level of consistency one step further: they are top quartile performers over the past five years as well. At the same time, 545 funds – 42. Children over five will be able to get the Chinese-made Sinovac vaccine, Lam said. Source: Morningstar This list is striking for two reasons. The first is that it is so short. By comparison, just 68 of 1 088 funds – 6% – gained more than 20% in 2019. There are 120 funds in this category with track records of at least five years, so this is just 3. Separately, Bloomberg News said Hong Kong’s international airport was set to ban transit by passengers from 150 designated high-risk places from January 15 to February 14, citing the unnamed sources.3% of them. Read: Eight local unit trusts that caught our eye [last] year Local equity funds are back in favour Top-performing unit trusts in SA over the past decade The magnitude of the change in fortunes is perhaps best illustrated by the performance of funds in the Asisa (Association for Savings and Investment) South Africa multi-asset high equity category.co.

That is a vanishingly small percentage of managers to have shown this level of consistency. Of course one might argue that, given how markets have behaved over the past five years, if managers were true to their philosophy then it would make sense for them to underperform somewhere.4%, according to Morningstar. Lam did not mention new air transit rules during her press conference. By implication, however, that argument would suggest that the managers of these four funds somehow didn’t stick to their philosophy. That would be an extremely bold statement to make in the case of a firm as stable as M&G.4%. It would also do a disservice to the managers on the other three funds, all of whom have been managing money for decades. Less than 75% of eligible people have had a first dose, while just under 70% have had a second one.za\/wp-content\/uploads\/2022\/01\/ANC-cadre-deployment-DA-300x200.

Luck will always play a role, but the managers of these portfolios are all experienced enough to have long-since established their investment DNA. Strength on the JSE The significant difference has been in the returns available from the local stock market. None of them are coming up with ideas on the fly. The ‘stick to your knitting’ argument therefore only goes so far.5%. There have since been more than 40 local transmissions of the Omicron variant, with more than 4,000 people considered close contacts sent into government-mandated quarantine, Lam said. Clearly, there has been room for managers to be both consistent in their approach, and in the outcomes they have delivered over this period. But only very few have got it right.2%.jpg","category":".

The gain without the pain The second point to note is that it is almost certain that these are not the four funds that any local fund selector would have named if the question had been posed as to which four equity portfolios were most consistent over the past five years. Lam said a disciplinary investigation was still going on into the behaviour of 13 senior government officials who attended a birthday party for a delegate to China's legislature. It is likely that the 36One equity fund managed by Citywire A-rated Evan Walker and + rated Cy Jacobs would have been on many lists.3%. The performance of M&G’s portfolio under Chris Wood and Yusuf Mowlana is also unlikely to have surprised many. But the other two funds are not widely held or recognised. That is 28% of the unit trusts with track records this long. “This is the most unfortunate event because of the large number of people involved,” Lam said, adding the officials should have complied with her appeal for people to avoid large gatherings. The Investec Wealth & Investments BCI Dynamic Equity fund, managed by Citywire + rated Barry Shamley has only R848 million in assets under management.

The Counterpoint SCI Value fund has just R380 million. Two of those were index trackers, tracking the FTSE/JSE Dividend Plus index. The performance of the Counterpoint portfolio is particularly interesting. For most of this period, it was managed by Sam Houlie and Raymond Shapiro. After average returns of 6% in 2020, funds in this category returned on average 6. Following the firm’s merger with RECM and Houlie’s subsequent departure from Counterpoint, Piet Viljoen is now in charge. It may be that there has been some extreme good fortune in that the timing of portfolio manager changes has coincided with shifts in market dynamics. That is below the strong performance in years like 2019 and 2016, but is not significantly below the five-year average annualised return of 7.

This may be part of why the fund has got some big calls right, such as the decision to move entirely out of offshore equity and thus benefit more fully from the bounce on the JSE. But this portfolio is nevertheless a very rare example of a value fund that has not been hugely volatile. Notably, 19 of the 109 funds in this category – 17. It did underperform its sector in 2017, but according to Morningstar, it has been top quartile in each of the past four years. In 2020, when most value managers struggled, the fund was the fourth best performing equity portfolio in South Africa. That is in line with this category’s five-year numbers. This illustrates why the argument that ‘the market wasn’t in our favour’ should never go unscrutinised.

If a value fund has performed this well across these different market periods, that shows there can be more to any style-oriented investment philosophy than just waiting for the market to help you out.8% – show annualised returns of 8% or more. Fund selectors should bear that in mind the next time they get that hoary excuse from a manager. Patrick Cairns is South Africa Editor at Citywire, which provides insight and information for professional investors globally. This was slightly ahead of the returns from recent years. This article was first published on Citywire South Africa here, and republished with permission. jQuery(document).3%.

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