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The JSE’s most popular stocks

And how they’ve changed since last year.

It should be no surprise that Naspers is the local share that appears in more unit trust portfolios than any other. However, its position is not as supreme as some might suppose.

According to the latest portfolio information available from Profile Media, Naspers is held in 410 different funds. That is only seven more than the second most popular share on the JSE – British American Tobacco.

The table below shows fund managers’ 10 favourite stocks based on portfolio holdings at the end of June 2018. It also indicates their positions on the same list last year.

Number of funds that hold JSE-listed stocks
Counter Funds 2017 rank
Naspers 410 1
BAT 403 2
Sasol 389 3
BHP Billiton 385 4
Anglo 377 9
Standard Bank 377 6
Old Mutual 345 8
FirstRand 338 7
Mondi 336 11
Growthpoint 331 17

Source: Profile Media

There has been no change in the four most popular stocks in the market. However, there has been a notable change at number five. Last year, that position was held by Steinhoff. Profile Media’s data shows that there are now only five funds that have more than 0.5% of their portfolio in that counter.

Anglo American has moved rapidly up the table as it has enjoyed a reversal in fortunes. The company’s share price has nearly doubled since the middle of last year. Having aggressively reduced its debt, the diversified miner is in a far better state than it was when it suspended its dividend at the end of 2015.

The two new entrants to the top 10 are Mondi and Growthpoint. The statistics for Mondi take into account funds that hold either Mondi Ltd or Mondi plc.

As the packaging and paper group was 11th on the list last year, it simply moved up to replace Steinhoff. It has, however, also been a strong performer in recent years. Since the start of 2015, the company’s share price has more than doubled.

Growthpoint’s popularity is more noteworthy as it was only 17th on the list last year. It has therefore been added to more portfolios than any other stock over this period.

This may seem counter-intuitive, given that the performance in listed property stocks has been pedestrian. Growthpoint’s share price has been flat over the last four years. The company is also heavily exposed to a South African economy that is struggling to gain any momentum.

However, its high and consistent dividend yield has made Growthpoint an attractive investment in a market that is going nowhere. It currently offers a yield of 8.2%, which on its own is a good return in an environment where the FTSE/JSE All Share Index has delivered an annualised return of just 6.4% over the last three years.

The stock that has fallen somewhat out of favour to accommodate Growthpoint is MTN. The mobile telecommunications company is now 12th on the list behind Richemont, so it is still widely held, but its recent troubles have impacted on its attractiveness. The company’s share price has fallen more than a third this year alone, and more than two thirds since its September 2014 high of R260 per share.

At the other end of the spectrum, the table below shows the least popular shares in the FTSE/JSE Top 40:

Number of funds that hold JSE-listed stocks
Counter Funds 2017 rank
Gold Fields 116 39
Clicks 125 n/a
Capitec 145 n/a
Life Healthcare 154 40
Netcare 170 28

Source: Profile Media

Clicks appears on this list despite being one of the JSE’s most consistent performers. Five years ago, shares in the retailer traded at R55, while today they sell for over R200.

Many fund managers have stayed away from Clicks because they have always considered it expensive. Its price-to-earnings ratio is currently over 35. Yet the stock keeps appreciating and its return on capital has been exceptional. It is also a new entrant to the Top 40.

Capitec is in a similar position. Although it sold off aggressively at the start of 2018 after the release of the Viceroy report, the bank’s share price is up 450% over the past five years. However many fund managers have been worried about how expensive the stock had become, and others may be concerned about the sustainability of its lending business.

As the least popular Top 40 stock, Gold Fields certainly doesn’t suffer from being too expensive. It trades on a price-to-earnings ratio of around 11.5. Analysts and fund managers have however been frustrated by the company’s inability to make a success of the South Deep operation from which so much had been expected.

The Top 40 share that has been most aggressively sold out of portfolios is Netcare. The hospital group’s challenges both at home and in its UK operations saw its share price falling from over R43 a share in April 2015 to as low as R22 per share in November last year. It has since staged something of a recovery, but fund managers are seemingly still wary of its prospects.

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So basically the top 10 holdings of most balanced unit trust managers in SA.

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