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Author: Patrick Cairns|

15 January 2013 08:54

How JSE-listed ETFs performed in 2012

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The two leading ETF's outperformed every local managed unit trust over last year.

ORAPA – As the exchange traded fund (ETF) market in South Africa continues to grow, the number of choices facing investors is becoming more diverse and more complicated. The number of different indices being tracked means that investors should regularly update themselves on how these different funds are performing and whether the index they have chosen is the right one for their needs.

The performances of local ETFs last year shows how variable performances between the funds can be. While the top ETF delivered returns of over 43%, the worst of them would have grown an investment by only 2%.

In total, 31 ETFs have been listed on the JSE for more than a year. The 2012 performances of all these funds are shown in the below table:

 

Fund

1YR Total return

TER (Q3 2012)

Satrix INDI Portfolio

43.51%

0.46%*

NewFunds eRAFI SA Financial 15 Index Fund

42.05%

0.62%

Satrix FINI Portfolio

35.94%

0.46%*

NewFunds NewSA Index Fund

32.76%

0.93%

Property Index Tracker Top Ten

31.44%

0.80%

Nedbank BettaBeta Equally Weighted Top40 ETF

31.11%

0.40%

NewFunds eRAFI SA Industrial 25 Index Fund

30.67%

0.59%

Property Index Tracker SAPY

30.56%

1.09%

Satrix SWIX TOP 40 Portfolio

27.49%

0.46%*

STANLIB Swix 40 Fund

27.49%

0.24%**

RMB Top 40 Portfolio

25.81%

0.21%**

Satrix DIVI Plus Portfolio

25.72%

0.46%*

Satrix 40 Portfolio

25.08%

0.46%*

STANLIB Top 40 Fund

25.06%

0.21%**

Nedbank BettaBeta Green ETF

24.66%

0.70%

NewRand

24.51%

1.58%

db x-trackers DJ Eurostoxx 50 Index ETF

24.44%

1.14%*

NewFunds MAPPS Growth Portfolio

23.99%

0.67%

NewFunds eRAFI Overall SA Index Fund

23.13%

0.23%

Satrix RAFI 40 Total Return Portfolio

23.09%

0.53%*

NewFunds MAPPS Protect Portfolio

20.04%

0.62%

db x-trackers MSCI World Index ETF

19.86%

1.14%*

db x-trackers MSCI USA Index ETF

19.53%

1.14%*

RMB Government Inflation Linked Bond ETF

18.74%

0.43%**

db x-trackers FTSE 100 Index ETF

18.31%

1.14%*

NewFunds Shariah Top 40 Index Fund

15.34%

0.49%

Zshares GOVI Exchange Traded Fund

14.95%

0.32%

db x-trackers MSCI Japan Index ETF

12.14%

1.14%*

NewGold

10.85%

0.40%

NewFunds eRAFI SA Resources 20 Index Fund

10.17%

0.53%

Satrix RESI Portfolio

2.25%

0.46%*

Source: Moneyweb

*Latest figures are for Q2 2012 **Latest figures are for Q4 2012

The first point worth noting is that the two leading ETF's over the last year outperformed every local managed unit trust over the same period. The top managed fund of 2012 was the Investec Emerging Companies Fund class R, which returned 40.71% in the 12 months to December. Both the Satrix INDI and NewFunds eRAFI SA Financial 15 topped that number.

This means that the Satrix INDI portfolio also outstripped every managed industrial sector unit trust. The best of those was the Stanlib Industrial Fund, which delivered a total return of 37.54%. That made it the fourth best managed unit trust fund in the country, even though it under-performed its benchmark index by around 5%.

The performance of the Satrix INDI wasn't about retail stocks either. The fund is dominated by SABMiller, which went up around 35% during the year, MTN, which gained over 30%, and Richemont, which had a spectacular year and was up in the region of 60%.

The NewFunds eRAFI SA Financial 15 also beat all of its managed peers. The best financial sector managed unit trust last year was the Nedgroup Investments Financials Fund class R, which returned 39.84%.

It is also noteworthy that the RAFI financial index out-performed the pure Fini 15. The main difference between the two at the moment is that the RAFI financial index is dominated by insurers, while the Fini 15 is heavily weighted towards banks. This means the RAFI got more out of the likes of Sanlam, Old Mutual, Liberty and Discovery, which all gained more than 40% over the year.

Interestingly, the RAFI financial index is also underweight on real estate stocks relative to the Fini 15. So it delivered superior performance even without the influence of this sector.

The performance of the NewFunds NewSA Index Fund is also worth noting. The NewSA Index weights the top 40 companies on the JSE based on their empowerment ratings, and this index outshone every other variant of the Top 40.

It also came in as the best-performing local large cap fund. The best managed fund in this sector was the Coronation Top 20, which gained 26.94% in 2012. Although this was better than the return of the pure Top 40 index, the NewFunds NewSA Index Fund, the Nedbank BettaBeta Equally Weighted Top 40 and the Satrix and Stanlib SWIX 40 funds all returned more.

Another fund that deserves a credible mention is the RMB Government Inflation Linked Bond ETF. Although it features well down on this particular list, it shouldn't really be compared to the equity funds above it. When measured against similar products, it was in fact the best-performing fixed interest fund in South Africa in 2012.

The index tracked by this fund is made up of the six South African Government Inflation Linked Bonds. It is a fairly recent innovation, and is so far proving to be a positive one.

It is unsurprising to see the two resource index funds at the bottom of the pile given the terrible year experienced by resource stocks. NewGold also failed to repeat it's last few stellar years as the gold price didn't enjoy as much of a run in 2012 as it had in preceding years.

While comparing the one year performance of these funds does bring out some interesting insights, serious investors should also be aware of their longer term records. 11 JSE-listed ETFs have been around for more than five years. The annualised performances of these funds from 1 January 2008 to 31 December 2012 are shown below:

 

Fund

5YR Total return

NewGold

19.17%

Satrix INDI Portfolio

16.76%

Satrix DIVI Plus Portfolio

15.83%

Property Index Tracker SAPY

14.05%

NewRand

9.26%

Satrix SWIX TOP40 Portfolio

9.19%

Satrix FINI Portfolio

9.18%

Satrix 40 Portfolio

8.24%

db x-trackers FTSE 100 Index ETF

1.02%

Satrix RESI Portfolio

0.47%

db x-trackers DJ Eurostoxx 50 Index ETF

-5.52%

Source: Moneyweb

 

Here NewGold is clearly the shining star, on the back of the near-doubling of the gold price since 2008.

The Satrix INDI and Satrix DIVI portfolios have also performed more than admirably over this 60 month period. The Property Index Trackery SAPY reflects the good run that property stocks have enjoyed in this time.

Again the Satrix RESI finds itself near the bottom of the pile, but in this period it is comfortably under-performed by the Deutsche Bank DJ Eurostoxx 50. Although European stocks showed a resurgence last year, they still haven't made back all of their losses.

For more, visit Moneyweb's Click-a-unit trust/ETF.

*This is a pure rating of exchange traded funds based on their performance in the 12 months to the end of December 2012. Prudent investors should be aware that past performance is not an indicator of future returns. It is also worth doing one's own analysis on the funds' relative risk profiles.

Topics: etfs, unit trusts, exchange traded funds, Satrix INDI, SABMiller, Stanlib, Richemont



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