SA’s top unit trusts over 10 years

Sector funds top the tables.
Property funds came out tops, with the biggest star being the Absa Property Equity Fund. Picture: Shutterstock

Local markets have been through a lot over the last ten years. It was a period that started with the global financial crisis in 2008, then saw the rand trading as low as R6.70 to the dollar in 2011 and as high as R16.85 in 2015, and ended with last year’s rally in both bonds and equities as investor confidence started to return after years of negative sentiment.

For many, this has been a period during which it has been very difficult to stay invested. Besides the ups and downs, there has been a general feeling of unease for some time about the sustainability of returns.

At the end of it, however, returns for local investors have been fairly good. As the table below shows, the JSE has not had a negative year since 2008, and in five of the last 10 years the market has been up 19.0% or more.

FTSE/JSE All Share Index total return
2008 2009 2010 2011 2012 2013 2014 2015 2016 2017
-23.20% 32.10% 19.00% 2.60% 26.70% 21.40% 10.90% 5.10% 2.60% 21.00%

Source: FTSE Russell

Overall, the All Share Index showed an annualised return of 10.41% for the ten years to the end of December. That is below its long-term average, but still well ahead of inflation, which has averaged just above 6%.

The local bond market has also done reasonably well. The ten year annualised return on the FTSE/JSE All Bond Index was 8.62%.

The local asset class that has performed best, however, is listed real estate. The FTSE/JSE SA listed property index has returned an annualised 14.79%.

It is therefore not surprising that the list of top unit trusts over this period is dominated by property funds. This was also the case last year, when 11 of the top 20 funds over the ten year period to December 31 2016 were in the property sector.

For the ten years to the end of 2017, this has gone up to 13 out of the top 20. The table below shows the list of the 25 top performers over the past decade.

SA unit trust performance to December 31 2017
Fund 10 year annualised return
Absa Property Equity Fund A 17.75
Coronation Industrial Fund P 16.35
Discovery Flexible Property Fund 15.49
Ashburton Multi Manager Property Fund B1 15.2
STANLIB Property Income Fund B1 15.1
Catalyst SA Property Equity Prescient Fund A 14.94
Centaur BCI Flexible Fund A 14.88
Prudential Enhanced SA Property Tracker Fund A 14.8
SIM Industrial Fund R 14.75
Nedgroup Investments Financials Fund R 14.72
Coronation Property Equity Fund A 14.45
STANLIB MM Property Fund B1 14.29
Investec Property Equity Fund A 14.24
Allan Gray-Orbis Global Equity FF 13.89
PSG Flexible Fund 13.85
Prescient Property Equity Fund A1 13.43
Old Mutual Global Equity Fund R 13.42
Old Mutual SA Quoted Property Fund 13.35
Select BCI Property Fund A 13.31
Momentum Real Growth Property Fund A 13.3
Marriott Dividend Growth Fund R 13.28
Coronation Top 20 Fund A 12.99
Momentum Financials Fund A 12.92
Coronation Financial Fund A 12.91
Aylett Equity Prescient Fund A1 12.65

Source: Morningstar

The dominance of property funds is obvious, led by the incredible performance of the Absa Property Equity Fund. Over the last five years in particular, this offering has stood out in its category.

Apart from the property funds, a number of sector funds also make the list. Two industrial funds and three financial funds appear.

The industrial sector unit trusts have benefited most obviously from the rise of Naspers, in which they tend to carry more weight than general funds. They have however also enjoyed the strong performance of other rand hedge industrials like Richemont and British American Tobacco.

The more notable funds on the list, however, are those who haven’t been supported so strongly by the performance of their underlying sectors. This includes the two global equity funds – the Allan Gray-Orbis Global Equity Feeder Fund, and the Old Mutual Global Equity Fund – as well as the two flexible funds and three general equity funds.

The Centaur BCI Flexible Fund has been the most impressive, having delivered an outperformance relative to the FTSE/JSE All Share Index of nearly 4.5% per year over this period. That is an annualised real return of more than 8%.

The top general equity fund over this period was the Marriott Dividend Growth Fund. This is particularly interesting because the fund’s strategy prioritises investing in stocks that pay sustainable dividends.

This is a fairly conservative strategy, and its portfolio is essentially built on defensive counters like consumer goods companies, healthcare providers and insurers. Ordinarily one wouldn’t expect significant outperformance from these kinds of companies, but they have been in high demand in the years since the global financial crisis as investors have sought out their bond-like qualities in a period when interest rates have been so low.

Finally, it must be noted that this list only shows unit trusts, so the Satrix Indi and CoreShares Proptrax Sapy ETFs do not appear even though they would qualify. The Satrix Indi has shown an annualised return of 16.27%, and the CoreShares Proptrax 13.99%.



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Yes this is the headline.

Because as everyone tells us you must choose your investments based on historical performance?

Past performance is not indicative of future returns. An old proverb

Pat please do a list of bottom unit trusts for the last 10 years.

“Pat please do a list of bottom unit trusts for the last 10 years.”

Or perhaps more importantly, show us of all the unit trusts how many beat inflation and how many could not keep up with inflation.
That will show the reality of the choice to be made.

Absa Property Equity Fund A 17.75 yearly growth

3 years ago I bought a house in Obs Cape Town with 100% borrowed money. The house price has gone up from R650k to R800k.
Is my percentage growth better than ABSA?

When you buy shares or unit trusts for say a million Rand you need to have a million rand. When you buy a property for a million Rand you need to have R100000.

R100000 is the base cost. If the property increases by 10% your investment has gone up by 100%. (less costs of course, but those are paid the rental, after 4 years you should be at break even). That is why you should have some exposure to rental property, even with the perceived hassles.
My 2 cents worth.

Try to get that profit anywhere outside of Western Cape (so location specific). Also lets see how prices grow after Day Zero.

Rental property does indeed have its uses, but also it’s downsides (try to convert it into cash in your account in under 5 days for example)

If you take into account the interest you are being charged on your bond, your rates and taxes, as well as other expenses, your real gain will probably by less than half you think it is.

I bought a flat in CPT a few years ago for 400k which i am renting out for just over R11k pm. Luckily its paid off before the end of this year. Its worth around 1.8m now.

If I take into account the opportunity cost of my time and energy i put into the letting the place, you realise that property Unit Trusts as less of a hassle and less risky.

50% of tenants default in CPT. I am lucky to have a good tenant for now.

Residential property is never a clear cut investment. LOTS of hidden costs.

Although, I dont see property growing much more in CPT anytime soon.

BTW, has anyone heard from Magnus Heystek ? He is awfully quiet on investing offshore with the Rand strengthening and the JSE having a fantastic 2017 overall.
Probably busy doing damage control with all his clients who lost their money from his advice in going offshore.

…the advice of MH has been worthwhile

Fundsmith equity to mention one

With the euphoria of Cyril, one can see the fruit being picked before its time

Base effect next year (when 2008’s crash comes into it) will prove what tosh looking at things in such splendid isolation is.

Some kind of rolling average would make more sense to eliminate base effect? (maybe that’s done somewhere?)

Patrick can you please also perform a 10 year analysis comparing active general equity funds vs passive local (and global exposure if possible) nett of fees? Unfortunately the returns from active are gross of fees and hence difficult to analyse and decide.

Patrick has used the retail fund class, so the active fund returns in the table are net of fees. The annual management and performance fees (if applicable) are built into the price (NAV) of the fund.

The response my fin adviser gave was that the historical returns provided by active funds exclude fees, unless you work from NAVs + divs as you say.

Apart from tracking historical NAV’s and divs for funds over 10 years, I was hoping Patrick might be able to do an after fees comparison between active and passive general equity funds.

And obviously if you are invested via a LISP (PSG, AG or such) those added costs are your own baby and not the same for all investors.

The performance of these funds is always quoted after fees. There aren’t many passive unit trusts with 10 year records, so a comparison would not be very comprehensive at the moment.

Thanks for the reply Patrick!

The interesting feedback I received recently is that the fact sheets generally disclose returns before fees. The reasoning was that they charge different fees for different platforms and only slightly alter their fact sheets. Unfortunately the sheets I reviewed did not specify and I’m not sure where to verify this.

This in essence why I myself am contemplating reviewing performance after the fund’s TER, excluding of course platform and adviser fees. For the missing periods one could perhaps track the ALSI as a proxy for the passive funds, although not ideal.

Patrick thanks for this. Always most helpful info for me when investing for friends/family.

Maybe M Jordaan’s new ‘tools’ will include a crystal ball for us for investing over the next 10-30 years 🙂

End of comments.




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