Share

Global unit trust gains

A Fin24 user wants to know why global category unit trusts are performing so well. He writes:

What is the reason for global category unit trusts giving excellent returns for the past year?

Is this due to the weak rand?

What will happen to global category unit trust performances when the rand starts to become a strong currency?

Jannie Leach of Nedgroup Investments responds:

During 2013 global equities delivered 27.4% (in USD), so any portfolio exposed to this asset class would have done well.

The rand also depreciated by 23.5% during this period, which would have added to a South African investor's rand returns. global equities delivered 57.2% in ZAR.

So to answer the first and second question:

- Global unit trusts invested in global equities would have done well due to global market growth and the currency weakening.

- Global unit trusts not invested in equities would have done well mainly due to the currency weakening.

- Strengthening of the rand will, therefore, lower returns, but it is not the only factor determining returns.

The total return received by a SA investor in a rand denominated global unit trust has two main dependencies:

- Performance of global asset classes

- Strengthening or weakening of the rand relative to the dollar.

- Fin24

Do you have a pressing financial question? Post it on our Money Clinic section and we will get an expert to answer your query.

Disclaimer: Fin24 cannot be held liable for any investment decisions made based on the advice given by independent financial service providers.

Under the ECT Act and to the fullest extent possible under the applicable law, Fin24 disclaims all responsibility or liability for any damages whatsoever resulting from the use of this site in any manner.

We live in a world where facts and fiction get blurred
Who we choose to trust can have a profound impact on our lives. Join thousands of devoted South Africans who look to News24 to bring them news they can trust every day. As we celebrate 25 years, become a News24 subscriber as we strive to keep you informed, inspired and empowered.
Join News24 today
heading
description
username
Show Comments ()
Rand - Dollar
18.88
+0.3%
Rand - Pound
23.85
+0.2%
Rand - Euro
20.37
+0.3%
Rand - Aus dollar
12.31
+0.3%
Rand - Yen
0.12
+0.3%
Platinum
908.05
0.0%
Palladium
1,014.94
0.0%
Gold
2,232.75
-0.0%
Silver
24.95
-0.1%
Brent Crude
87.00
+1.8%
Top 40
68,346
0.0%
All Share
74,536
0.0%
Resource 10
57,251
0.0%
Industrial 25
103,936
0.0%
Financial 15
16,502
0.0%
All JSE data delayed by at least 15 minutes Iress logo
Company Snapshot
Editorial feedback and complaints

Contact the public editor with feedback for our journalists, complaints, queries or suggestions about articles on News24.

LEARN MORE
Government tenders

Find public sector tender opportunities in South Africa here.

Government tenders
This portal provides access to information on all tenders made by all public sector organisations in all spheres of government.
Browse tenders