ETFs perform well but investors are cautious

If you’re a fan of exchange-traded funds (ETFs), you’ll be interested to know that the Satrix INDI 25 ETF continues to outperform other index-tracking products in the local market.

According to the etfSA Performance Survey — which is updated every month and looks at total return over the period one month to five years for index tracking unit trusts and ETFs — the INDI holds a clear lead, with a return of 17.63% each year over the past five years, a 32.66% return over the past 12 months and 7.88% over the past three months.

The NewFunds eRAFI INDI 25, which tracks a basket of 25 local industrial shares using fundamental indexation, has produced above-average total returns, too (27.75% over one year and 6.75% over the past three months).

This shows that funds that track the FTSE/JSE industrial sector have rewarded their investors; another prime performing area of the equity market it the property sector. The Prudential Enhanced SA Property Tracker Fund, which is a unit trust, is in the top three funds for both the five-year and three-year periods.

The Proptrax ETF, which uses purely beta methods of exactly tracking the SAPY index, has closely mirrored or exceeded the performance of the other property unit trusts, which use more active portfolio selection methods, and remains a good option for investors seeking exposure to this asset class.

etfSA’s managing director, Mike Brown, says it’s puzzling that retail and institutional investors are relatively uninterested in these products, given the solid performance of equities, as shown in the survey.

It seems likely that investors have shown a preference for money market and fixed-interest funds because they’re perceived to be safer than equity investments (more risky, more volatile). But investors should consider long-term capital growth — time in the market can certainly make a difference.

Read more news, blogs, tips and Q&As in our Smart Money section. Post questions on the site for independent and researched information

We make it make sense

If this story helped you navigate your world, subscribe to the M&G today for just R30 for the first three months

Subscribers get access to all our best journalism, subscriber-only newsletters, events and a weekly cryptic crossword.”

Related stories

WELCOME TO YOUR M&G

Already a subscriber? Sign in here

Advertising

Latest stories

Nthikeng Mohlele comes up short with ‘The Discovery of Love’

The talented novelist Nthikeng Mohlele’s debut short-story collection lacks the vitality that makes short stories magical

What is at root of white anxiety in post-apartheid South...

Some white people think any discussion of racism or its legacy is an attempt to shame or condemn them for the ‘sin’ of their whiteness

OPINION| ANC’s socialist thinking is crushing South Africa’s future

The Cold War ended more than three decades ago. That period of history showed that socialism, at a country scale, is unsustainable

Suicide cases soar in Zimbabwe

The economic crisis in the country appears to be pushing people over the mental edge
Advertising

press releases

Loading latest Press Releases…
×