Words on Wealth: How your collective investments performed in the first quarter of 2023

If you had panicked and liquidated your investments at that low point, you would have missed out on all that lovely growth. Photo: Pexels.com

If you had panicked and liquidated your investments at that low point, you would have missed out on all that lovely growth. Photo: Pexels.com

Published Apr 23, 2023


After reaching record levels of above 80 000 points in early January, the local stock market, as represented by the JSE All Share Index (Alsi), declined, probably on the back of South Africa’s load-shedding woes, continuing global inflation worries, and the US and European banking crisis, which, it seems, turned out to be not such a crisis after all.

The stock market fared badly in mid-2022, but made a strong recovery in the 4th quarter. Momentum fizzled out and the market took a dive at the end of March (it has since nudged higher). This resulted in the Alsi being virtually flat over the 12 months to the end of March (0.25%) although it did achieve 4.18% for the quarter.

It’s interesting to compare the straight index, which plots share prices, with the total return index (TRI), which plots performance with dividends reinvested: over the 12 months, the Alsi TRI delivered 4.9%. The 4.65 percentage-point difference shows the importance of dividends as a component of equity returns, and why the straight index is not an accurate indicator of returns.

Looking at the different market sectors, industrial shares came out shining: the industrial index was up 13.61% for the quarter and 25.9% for the 12 months. Financials were flat for the quarter (0.44%) but lost 9.30% for the year to the end of March. After a couple of prosperous years, the mining sector (resource stocks) was down: by 4.42% for the quarter and by 14.10% for the year. Local listed property remained in the doldrums: down 5.05% for the quarter and down 3.36% for the year. All stock market and fund performance figures have been provided by ProfileData.

Widening our horizon, the MSCI World Index, which represents 1 500 companies across 23 developed countries, was up 12.18% in rand terms for the quarter and up 11.26% for the year.

The rand weakened over the quarter, from R17.02 to R17.79 against the US dollar.

Consumer Price Index inflation in March was 7.1% year on year.

Collective investments

Here’s how the most popular categories of local unit trust and exchange traded funds performed to end March this year:

* Global Equity General. This was the best-performing category over the quarter and the year. These funds, denominated in rands, invest in global companies, typically by feeding into offshore funds. The average fund delivered 10.95% for the quarter and 10.51% for the year.

* Worldwide Multi Asset Flexible. These funds have the widest mandate of any category of collective investments: they can invest in any asset class anywhere in the world with no restrictions. On average, they delivered 7.53% over the quarter and 7.99% over the 12 months to the end of March.

* SA Equity General. These funds must have the bulk of their portfolios invested on the JSE, and in many cases this is close to 100%. They did not perform well, on average, over the quarter (2.31%) or the year (1.17%).

* South African Multi Asset High Equity. This category comprises the popular “balanced” funds, which can invest up to 75% in equities, with the remainder in other asset classes such as bonds and cash. While they didn’t beat inflation, they did outperform the pure SA equity funds: 4.29% for the quarter and 5.13% for the year.

* SA Money Market. These low-risk funds, invested in bank deposits and related cash instruments, delivered 1.92% for the quarter and 5.81% for the year. Taking inflation into account, their real (after-inflation) return was -1.20%

* SA Interest Bearing Short Term. These funds invest mainly in short-term local corporate and government bonds. They delivered 2.06% for the quarter and 6.80% for the year.

* SA Interest Bearing Variable Term. Invested in local bonds with longer terms to maturity, these funds returned 2.81% over the quarter and 5.31% over the year.

* SA Real Estate. The funds in this category invest in listed property companies and real estate investment trusts on the JSE, and their performance reflects the troubled state of the property sector: -4.96% for the quarter and -5.60% for the year.

Three-year performance

Just a quick note about investment performance over three years, because it was three years ago (can you believe it?) that Covid hit, draconian lockdowns were imposed by governments, and the financial markets imploded. The Alsi went from about 58 000 points to about 38 000 points in a matter of days. By March 31, 2020 it was up to about 44 000. Three years later it was 76 100, an increase of 73%, which translates into a compounding rate of about 20% per year. The Alsi TRI delivered 24.2% a year over the three years, and the average SA general equity fund delivered 21.5%.

If you had panicked and liquidated your investments at that low point, you would have missed out on all that lovely growth.


Unit trust performance is measured and rewarded every year at the Raging Bull Awards. Please read our First Quarter Personal Finance Magazine - RAGING BULL AWARDS SOUVENIR EDITION AVAILABLE ONLINE NOW!