Daily Investor analysed three South African equity funds – Foord, M&G and Nedgroup – and found that the M&G Equity Fund has consistently outperformed the other two funds and the Satrix JSE Top 40 and JSE All Share Index.
South African equity funds are limited to investing only in equities listed on the JSE. This makes these funds subject to volatility, as the South African economy and politics can influence their returns.
However, there are excellent opportunities in the South African market which give local investors exposure to SA Inc and international companies.
M&G Investments has shown that it is possible to generate good returns for investors through informed decisions and prudent investment principles.
Here is a look at the three funds we compared and how they performed against each other and against widely accepted benchmarks.
M&G Equity Fund
The M&G Equity Fund provides broad-based exposure to shares that offer value and medium to long-term growth. It is largely invested in the communication services, basic materials, and financial services sectors.
Its top five holdings are Naspers and Prosus, MTN, Glencore, Standard Bank, and Absa.
It is the largest fund of the three compared in this article and the best performer since inception and over three and five years.
This fund has also successfully outperformed the Satrix Top 40 and All Share Indexes over one, three and five years.
Foord Equity Fund
The Foord Equity Fund aims to earn a higher total rate of return than the South African equity market without assuming greater risk.
The fund does not shy away from companies based in South Africa, as its top five holdings are Naspers, Prosus, Aspen, Standard Bank, and FirstRand.
This fund has been the best performer over the past year and has beaten the Satrix Top 40 and All Share Indexes since inception.
Nedgroup Investments SA Equity Fund
The Nedgroup Investments SA Equity Fund is aimed at investors “seeking exposure to the domestic equity market with maximum capital appreciation as their primary goal over the long term”.
This fund is biased towards the basic materials sector, which comprises 31.8% of its portfolio.
The top five shareholdings in this fund are Prosus, British American Tobacco, Anglo American, Absa, and FirstRand.
This fund is the smallest of the three compared in this article, but also the youngest.
It has outperformed the Satrix Top 40 and All Share Indexes over one year and outperformed the Satrix Top 40 since its inception. However, it has underperformed both indexes over three and five years.
|Measure||Foord Equity Fund||M&G Equity Fund (A class)||Nedgroup Investments SA Equity Fund (Class A2)|
|Portfolio size||R3.6 billion||R5.05 billion||R3.3 billion|
|Inception date||1 September 2002||2 August 1999||27 March 2014|
|Benchmark||FTSE/JSE Capped All Share Index (prior to 1 July 2018 FTSE/JSE All Share Index).||ASISA South African – Equity – General Category Mean||FTSE/JSE Capped SWIX|
|Currency||South African rands||South African rands||South African rands|
|Total investment charges||1.17%||2.30%||1.58%|
|Investment horizon||>5 years||≥7 years||Minimum 5-7 years|
|Fund||1 year||3 years||5 years||Since inception|
|M&G Equity Fund||10.80%||22.70%||11.00%||16.20%|
|Foord Equity Fund||13.30%||16.90%||5.80%||14.00%|
|Nedgroup Investments SA Equity Fund||10.10%||17.80%||7.60%||8.70%|
|Satrix Top 40 Index Fund||6.16%||19.46%||9.84%||8.56%|
|Satrix ALSI Index Fund||5.57%||18.54%||8.86%||9.49%|
*Note that all information on the three funds compared in this article was obtained from their February 2023 factsheets.