Coronation gives its clients a reason to smile

Coronation’s South African equity fund has outperformed the SATRIX Top 40 ETF, which means its clients received more money than they would have if they invested in the market.

The Coronation SA Equity Fund invests solely in South African shares, with the goal of providing the best long-term growth.

While investments in foreign markets are expressly excluded, the fund can invest in international companies listed in South Africa. 

The fund has R3.15 billion of assets under management. It has a high-risk profile and recommends an investment horizon of at least 10 years.

The fund is 99% invested in South African shares, 0.5% in SA-listed real estate assets, and 0.5% in cash.

There are no restrictions on the amount of exposure the fund can have to different sectors, such as mining, financial, or industrial companies.

Its biggest equity holdings are in financials, technology, consumer services, basic materials, and consumer goods.

Over the past three years, the retail fund class has had an average total investment charge of 1.73% per annum. Over the last year, it was 1.84%.

It raises the question of whether it was worth paying this investment charge. We assessed whether Coronation’s SA Equity Fund outperformed the market.

Daily Investor compared the Coronation SA Equity Fund performance to that of the SATRIX Top 40 exchange-traded fund (ETF).

The SATRIX Top 40 ETF is a passively managed fund that tracks the performance of the JSE Top 40 Index as closely as possible.

Due to the fund’s passive nature, the SATRIX Top 40 ETF has very low fees. The fees for this ETF is around 0.1%.

If R100 were invested in the SATRIX Top 40 5 years ago, it would be worth R163 today. This translates to a compounded annualised return of 10.2% for the 5-year period.

If R100 had been invested five years ago in the Coronation SA Equity Fund, it would have grown to R168 today. This translates to a compounded annualised return of 11.0%.

This shows that the Coronation SA Equity Fund outperformed the market and provided its clients with the value it promised.

It further showed that the fund’s portfolio managers, Karl Leinberger and Sarah-Jane Alexander, performed well.