These are SA's best unit trusts

INVESTMENT INSIGHTS

Author: Patrick Cairns|

19 February 2013 10:34

From: http://www.moneyweb.co.za/moneyweb-investment-insights/

The top performers over five, ten and fifteen years.

ORAPA – The last decade and a half has seen more than its share of market turmoil. Over this time we've seen the dot-com bubble, 9-11, the Chinese stock bubble of 2007, the financial crisis, a global recession and the sovereign debt crisis in Europe.

And yet, local equity investors have come out of it all pretty okay.

Between January 1 1998 and December 31 2012, the FTSE/JSE Shareholders Weighted All Share Index produced annualised growth of 15.6%. This is well above inflation, which averaged around 6.5% for that period.

Of course, not all local unit trusts made the most of this situation. But for the stars of this space, it's been a good ride.

Taking the view that unit trusts should be long-term investments, we have looked at the top-performing domestic equity and real estate funds over the last five, ten and fifteen years. What we found may surprise you.

Five years

Over the last 60 months, property has been the undisputed king of the JSE, and that shows in the figures. Eleven of the best 15 performers over this time have been real estate funds.

While all of these property funds have been an outstanding investments relative to other unit trusts, it is nevertheless worth noting that only two of them actually out-performed the FTSE/JSE SA Listed Property Index. Annualised, the index was up 15.89% over this period.

The Marriot Dividend Growth Fund was comfortably the best general equity fund over this time-frame. The next best was the Foord Equity Fund, which produced an annualised return of 12.90%. By comparison, the FTSE/JSE Shareholders Weighted All Share Index was up 10.60%.

Amongst the large cap funds, the Coronation Top 20 Fund completely outpaced the Absa Rand Protector Fund, which gave an annualised return of 10.55%. Both funds were, however, well above the 8.80% of the FTSE/JSE Top 40 Index.

After the Coronation and Stanlib Industrial Funds, the next best in the Industrials category was the SIM Industrial Fund. It delivered an annualised return of 12.68%. None of these funds, however beat the 16.50% of the FTSE/JSE Indi 25.

Ten years

The range of unit trusts that delivered leading performances over the last ten years is the most diverse in this analysis. Small cap funds make their mark here, with the two best funds both coming from this category and four in total making it into the top 15.

The list also includes four industrial funds, three real estate funds, two value funds, one large cap fund and one general equity fund.

The smaller companies funds have gained from having a much stronger universe of stocks to choose from in recent years and that has been one of the primary reasons for their good showing. As the quality of these companies has improved, so they have delivered the higher growth one would like to see from them.

It hasn't all been rosy for small cap funds though. While the above funds have glittered, the Stanlib Small Cap Fund was the third worst performing fund in the country over the same period.

In terms of the industrials, the Stanlib and Coronation Industrial Funds are again top of their sector here, and this time both marginally out-performed the index. The FTSE/JSE Indi 25 delivered 24.40% over this period. The performances of the Old Mutual Industrial Fund and Momentum Industrial Fund, while excellent relative to other unit trusts, came in below the index.

Again, the Coronation Top 20 Fund beat its benchmark index over this period. Annualised, the FTSE/JSE Top 40 was up 18.10%. It's also worth noting that this fund beat every general equity fund over this time frame.

Fifteen years

This is where we find perhaps the biggest surprise: although resource stocks and consequently resource funds have performed horribly over the last few years, the five best funds over the last decade and a half are all resource funds.

This is despite the fact that all five of these are in the bottom 20 funds over the last five years. The Stanlib Resources Fund, which is fourth on this list, has even delivered a negative return since 2008.

While it should be taken into account that only 38 domestic equity unit trusts have been around for this long and therefore the competitive universe is much smaller, these resource funds have nevertheless been outstanding. Every one of them has delivered annualised returns greater than 21.00%.

Source: Moneymate & moneyweb

Coming in directly after the resource funds there is one small cap fund and two value funds. It is worth noting that although value funds will now be classified as general equity funds, value investing is still a philosophy that investors may want to seek out. The Nedgroup Investments and Investec Value Funds have out-performed every general equity fund over this fifteen year period.

One of the most interesting funds on this list is the only real estate fund that appears – the Marriot Property Equity Fund. What is fascinating is that this fund is the worst performer in the real estate category over the last five years, where it has delivered an annualised return of just 7.83%. However, it's standard deviation over the last fifteen years of 10.44% is comfortably the lowest of any domestic equity or real estate fund in the country.

The Kagiso Top 40 Tracker Fund is another worth highlighting because it was one of the first index trackers in the country, pre-dating the establishment of exchange traded funds on the JSE. It slots into 14th place on this list, meaning that early adopters of the index tracking philosophy in South Africa would have beaten 63% of all managed funds over this period.

Interestingly, not a single fund appears in the top 15 over all three time frames. The closest is the Stanlib Industrial Fund, which is 15th over five years, third over 10 years, and 20th over 15 years.

The overall picture

Of the 38 funds that have been around for the full 15 years, 16 beat the FTSE/JSE Shareholders Weighted All Share Index. In other words, 42.1%. Over ten years, this figure decreases to just 31.3%, and over five years slips even further to 28.6%.

Expressed another way, the average (median) annualised return of domestic equity and real estate funds over the last five years is 8.22%. Over ten years it is 18.84% and over fifteen years 15.40%. In all three cases, the FTSE/JSE Shareholders Weighted All Share Index comes in higher – 10.6%, 20.1% and 15.6%.

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

Topics: unit trusts, long-term investment, domestic equity, real estate

Author: Patrick Cairns|

19 February 2013 10:34

From: http://www.moneyweb.co.za/moneyweb-investment-insights/

NIT funds deliver good performance

APRIL 12, 2012 BR RESEARCH

Article from Business Recorder

The National Investment (Unit) Trust, the countrys leading fund, posted a healthy year-on-year bottom-line growth of around 30 percent during the first nine months of the current fiscal year.

The NIT has registered a net profit of Rs4.34 billion (without impairments) during 9MFY12, thereby yielding an earning per unit of Rs3.23, as opposed to Rs2.85 during the same period last year.

The bottom-line growth is symptomatic of growth in dividend income and realised capital gains.

This can be gauged from the fact that the Fund saw a hefty 37 percent year-on-year growth in its dividend income to Rs2.15 billion during 9MFY12.

At the same time, realized capital gains grew by around 63 percent to Rs891 million.

The Funds Net Asset Value (NAV) amounted to Rs30.01 per unit as on March 31, glided higher by around seven percent since the start of the current fiscal year.

With exposure in equities, NIT-State Enterprise Fund (NIT-SEF) and NIT-Equity Market Opportunity Fund (NIT EMOF) flourished at the heels of growth in capital gains and dividend income.

With the KSE-100 index up by 10.31 percent during the first nine months of FY12, NIT EMOF outperformed the market benchmark index by a whopping margin of 7.8 percent.

The NIT Government Bond Fund (NIT-GBF) recorded a slight drop in its net income, hammered by a decline in income from government securities.

This is down to redemptions and a decline in yields on sovereign instruments.

The fund holds exposure in sovereign instruments and National saving bonds and yielded an annualized return of 9.5 percent to its unit holders.

Growth in income from fixed income instruments supported the performance of the NIT Income Fund, with the funds net profit up by 19 percent, year-on-year, to Rs185 million in 9MFY12.

The fund managed to yield an annualized return of around 12.69 percent to its investors, thereby outperforming its benchmark by 19 bps.

Article from Business Recorder

Aberdeen Asian Smaller Companies Investment Trust research update

Ben Yearsley | Tue 10 April 2012

Article from Hargreaves Lansdown 

Combine the growth prospects of smaller companies with Asia's vibrant economies and I believe a tremendous long-term opportunity presents itself.

An interesting way to access this theme is through the Aberdeen Asian Smaller Companies Investment Trust. Aberdeen's expertise in Asia is well known. Their Aberdeen Asia Pacific unit trust has been on the Wealth 150 since its inception in November 2003. Smaller companies and emerging markets are both higher risk areas in which to invest and any investment can fall in value as well as rise.

Aberdeen's Asia team is headed by Hugh Young and their approach is the same on all the funds they manage. They believe their focus on "quality" companies helps steer them through volatile markets. They suggest long-term share prices reflect the quality of the underlying business, so they look to identify their best ideas, but only invest when the valuation is right.

One benefit of the investment trust structure is that money does not flow in and out of the fund on a daily basis as it does with an open-ended fund. This means the team can take positions in some of the smallest companies in the region, which can be more illiquid (harder to buy and sell). This allows them the flexibility to take a long-term view and uncover opportunities that might be off the radar of most investors. None of the top ten holdings feature in the MSCI Asia Pacific Index, but all have been in the portfolio for at least eight years.

While Asian stock markets have started 2012 positively, which is beneficial for existing holdings in the fund, Hugh Young and the team note valuations are less attractive than they were, making it harder to find new opportunities. The portfolio is currently tilted towards companies capitalising on domestic consumption in the region. Consumer businesses make up almost 45% of the portfolio compared to around 13% of the index. Top ten holdings include Siam Macro (a Thai retailer), Multi Bintang (a brewer) and Godrej (a consumer products business).

At a country level the team have found excellent opportunities in India, Malaysia, Thailand, and Indonesia; while it is harder to find high quality smaller companies in China, Taiwan and Korea. Ultimately the decision on whether to invest is based on the quality of the companies alone, not their location.

Investment trusts can borrow money, otherwise known as gearing, to enhance returns. Aberdeen takes a prudent approach and gearing over the long term has typically been no more than 10% of the trust's assets. Nevertheless, while gearing can add value in a rising market in a falling market it can magnify losses. Furthermore, the share price of an investment trust does not necessarily reflect its underlying net asset value (NAV). This trust is currently trading at or around its NAV and those considering an investment might wish to monitor the price before investing if they believe it could fall to a discount.

We believe Aberdeen's Asia team is of the highest calibre in the region. For investors looking for exposure to smaller companies in the Far East we believe this could be an excellent addition to a more adventurous portfolio.

Find out more about investment trusts including the costs associated with buying, selling and holding them in a Vantage account.

The value of investments can go down as well as up, this means you could get back less than you invested. Therefore all investments should be regarded with a long term view. No news or research item is a personal recommendation to deal. If you are unsure about the suitability of an investment please contact us for advice.

Article from Hargreaves Lansdown

Incapital Extends Diversified Suite of Products with Unit Trusts Designed in Collaboration with Leading Global Partners

April 4, 2012, 1:52 p.m. EDT

Article from Market Watch

BOCA RATON, Fla. and CHICAGO, April 4, 2012 /PRNewswire via COMTEX/ -- Incapital LLC announced Monday the launch of Incapital Unit Trusts, providing individual investors with a convenient, transparent and cost-effective way to own a professionally-selected and diversified fixed portfolio of securities.

"Incapital is pleased to extend our already robust platform of products to meet the unique needs of various investment portfolios," said Incapital Chief Executive Officer John Radtke. "Incapital Unit Trusts will integrate institutional strategies from our leading global partners into vehicles designed for 'buy and hold' investors."

Incapital will announce global institutional partners for Incapital Unit Trusts in the near future.

Incapital's Unit Trust division is directed by John Browning who previously served as Managing Director of the Unit Trust division at Guggenheim Funds Distributors Inc. and held leadership positions at Van Kampen Investments and Invesco PowerShares.

"We are hitting the ground running in this growing Unit Trust market with the top tier quality products and service Incapital's clients have come to expect," said Browning. "The ability to strategically target a particular asset class or investment methodology combined with options to build core positions make unit trusts a potential lower cost option from which to build an investment portfolio."

Incapital Unit Trusts generally remain fixed and require a low minimum purchase of $1,000. The professionally selected basket of securities may allow investors to diversify market risk without the large capital commitment and time it would require to achieve this type of diversification on their own.

Incapital Unit Trusts have a predetermined investment life which provides for regular opportunities to review and evaluate an investor's current investment needs. Additionally, the daily redemption feature provides flexibility to meet an investor's individual situation.

About Incapital

Incapital LLC is a securities and investment banking firm with offices in Chicago and Boca Raton, Florida. Incapital underwrites and distributes fixed income securities, structured notes and unit trusts through more than 700 broker-dealers, institutions, advisors and wealth managers. With a diverse range of new issue and secondary market offerings, Incapital specializes in U.S. Agency securities, corporate notes, CDs, mortgage-backed securities, municipal bonds, and market-linked notes.

Investors should consider their investment objectives as well as the risks, fees, charges and expenses of the unit investment trust(s) carefully before investing. Investors should also read the prospectus, which contains this and other information about the unit investment(s). To obtain a prospectus, please download one from the SEC's EDGAR filing system or the Unit Trust Offerings page on www.incapital.com .

More information about Incapital is available at www.incapital.com .

Incapital LLC, Member FINRA/SIPC, 200 South Wacker Drive, Ste. 3700, Chicago, IL 60606

SOURCE Incapital LLC

Article from Market Watch