Returns from Old Mutual’s international fund crush domestic offering
An Old Mutual fund that offers investors exposure to international equity offers substantially better returns than a fund offering exposure to domestic equity.
Old Mutual is a financial services group that offers a range of financial products that are intended to help clients grow their wealth.
Some of Old Mutuals’ offerings have greater exposure to offshore assets than others.
For example, the portfolio of the Old Mutual Global Equity fund is as invested in foreign equities as possible.
In comparison, Old Mutual Equity Fund is predominantly allocated toward South African equity. There is still foreign equity in the portfolio, but offshore exposure is capped at 45%.
The biggest holdings in the Old Mutual Global Equity fund are Apple, Microsoft, Amazon, Visa, and United Healthcare.
The Old Mutual Equity Fund’s top holdings are ABSA, British American Tobacco, FirstRand, Prosus, and Standard Bank.
Returns
The Old Mutual fund prioritises foreign equity and has produced superior returns to the domestic fund in any time frame.
Both funds recommend remaining invested in the fund for more than 5 years.
Over that time period, the Old Mutual Global Equity Fund has returned 15.1% per year, while the Old Mutual Equity Fund has only returned 5.7% per year.
The domestically allocated fund was only started in 2018 and has provided an annualised return of 5.7% per year since inception.
The global equity fund was founded in 2000 and has delivered an annualised return of 13.6% since then.
Here is a summary of the historical returns of the funds:
| Fund | 1 year | 3 years | 5 years | Since inception |
| Old Mutual global equity fund | 13.7% | 17.0% | 15.1% | 13.6% |
| Old Mutual equity fund | 1.5% | 11.8% | 5.7% | 5.7% |
| Difference | 12.2% | 5.2% | 9.4% | 7.9% |
Based on the Benchmark
The funds have different benchmarks against which their performances are measured.
The Old Mutual Global Equity Fund is measured against the MSCI World Index, which has 1,509 constituents across 23 developed countries.
The Old Mutual Equity Fund uses the FTSE/JSE Capped SWIX Index as a benchmark for its performance.
Both funds have underperformed their benchmark over a five-year period. The global equity fund has fallen further below its benchmark than the domestic equity fund over a five-year basis.
Here is the performance of the global equity fund against is benchmark:
| Fund | 1 year | 3 years | 5 years | Since inception |
| Old Mutual global equity fund | 13.7% | 17.0% | 15.1% | 13.6% |
| MSCI World Index | 10.6% | 16.3% | 17.4% | 14.0% |
| Difference | 3.1% | 0.7% | (-2.3%) | (-0.4%) |
Here is the performance of the Old Mutual equity fund against its benchmark:
| Fund | 1 year | 3 years | 5 years | Since inception |
| Old Mutual equity fund | 1.5% | 11.8% | 5.7% | 5.7% |
| FTSE/JSE Capped SWIX | 4.6% | 15.6% | 6.7% | 6.7% |
| Difference | (-3.1%) | (-3.8%) | (-1%) | (-1%) |
The benchmark of the global equity fund is substantially more aggressive than the standard equity fund.
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