Monday, 23 July 2012 - 20:00
Charts
Picking the Current Winner Who hasn’t heard the warning “past performance is no indication of future performance” before? But why do we still base our investment choices solely on the past performance of a fund?
We cling on the hope that a winning fund will continue its outperformance. By basing your decision only on the past performance of the fund you run the risk of investing into fund after its outperformance or disinvesting out of a good fund at wrong time.
The graph below illustrates this point. It shows the investment flows of Allan Gray Stable fund. This is overlaid with the previous year’s alpha versus the ALSI, the black line, and the following year’s alpha versus the ALSI, the red line.
Source: Allan Gray
The graph shows how investors chase after past performance. In January 2009 R150m of investments was made into the fund due to 36% outperformance it had the previous year versus the ALSI. The following year the fund underperformed the market by 27%.
On the flip side, if you disinvested from the fund in December 2010, you would have missed the 10% outperformance over the following year.
From the graph you can clearly see how the investment and disinvestments lag the past performance of the fund.
The fund outperformed the markets in 2008, because it was able to protect capital during the credit crisis. It underperformed in 2009 because it wasn’t able to fully capture the market rally due to its low equity holding.
A fund’s investment process is much more important than its past performances. By understanding how the fund is managed you will better know what you should expect from the fund going. You will better understand when to increase your holding or to decrease it.
From the above chart we can see that it is evident that the classic warning “past performance is no indication of future performance” is not just an empty warning.
Kind regards,
Gerbrandt Kruger
www.seedinvestments.co.za
info@seedinvestments.co.za
021 914 4966
Mon, 23 Jul 2012
Top News
South African stocks fell sharply on Monday, tracking lower global markets as concerns about Spain's finances weighed while tumbling commodity prices hit mining stocks. Full story
Net sales revenue 19,410 24,805 (22). Gross profit on
metal sales 2 2,079 4,767 (56). Operating profit 399 4,752 (92).Loss)/profit
attributable to:
Owners of the
Company (464) 3,328 (114). Hea Full story |
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Syria acknowledged for the first
time on Monday that it had chemical and biological weapons and
said it could use them if foreign countries intervened. Full storyRussia formally notified the
World Trade Organization on Monday that it had ratified its
membership agreement, meaning it will become the 156th member of
the trade rules club on Aug 22. Full storyA Ukrainian court on
Monday put off until July 31 the hearings in a tax evasion case
against former Prime Minister Yulia Tymoshenko because she was
unable to attend the trial for health reasons. Full story |
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Markets | European stocks sank on Monday,
with a key blue-chip index tumbling to a three-week low and
piercing through a major support level, hurt. . . Full story | | U.S. stocks dropped on Monday
as McDonald's quarterly earnings missed expectations and the
latest signs from Spain pointed to a euro-zone debt crisis. . . Full story | | Gold slipped on Monday as
Spain's economic troubles fueled euro zone debt fears, but
safe-haven bids helped bullion outperform equities and
commodities and lifted. . . Full story | | World equity markets sold off
and the euro plumbed to new two-year lows against the dollar on
Monday after reports that more indebted. . . Full story |
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| Britain's top share index
plunged on Monday to its lowest level in three weeks and fell
back into the red for the year. . . Full story | | For the complete report please
see. . . Full story | | U.S. stocks dropped at the
open on Monday as Spain appeared closer to needing a sovereign
bailout and fears grew that Greece may. . . Full story | | European shares extended their
losses on Monday as a move by Spain to ban short-selling on all
Spanish securities raised fears that the. . . Full story |
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| South Africa's growth this year is likely to miss the government's current forecasts, Finance Minister Pravin Gordhan said on Monday, while. . . Full story | | Anglo American Platinum (Amplats), the world's top platinum producer, signaled on Monday it plans to trim loss-making shafts as producers of. . . Full story | | South Africa's maize stocks rose to 5.528 million tonnes at the end of June compared with a revised 2.871 million tonnes. . . Full story | | Growth in South Africa's economy remains "pedestrian", with the manufacturing sector vulnerable to weak global growth because of its impact on. . . Full story |
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| South Africa's AngloGold Ashanti said on Monday second-quarter earnings likely fell by as much as 30 percent, hit by the lower gold price and overshadowing a rise in production.. . . Full story | | South Africa's rand weakened against the dollar on Monday and government bonds also eased as fears increased that Spain may need a full sovereign bailout, hitting global investors' appetite for riskier. . . Full story | | Anglo American Platinum, the world's top platinum producer, said on Monday it was reducing its full-year production and project spending targets, hit by chronic weakness in prices and demand for the. . . Full story |
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Company News | Shareholders were advised that for the six months ended 30 June 2012,
*headline earnings per share is expected to be between 85%. . . Full story | | The company expects an improvement of more than 50% in headline earnings per share ("HEPS") for the six months ending 31. . . Full story | | Avusa Ltd. ("Avusa") shareholders and Mvela Group shareholders were referred to the announcements released by Mvela Group and Avusa respectively on. . . Full story | | Business Report noted that Pick n Pay has managed to cut its energy usage by 20% against its baseline and achieved. . . Full story |
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| Highlights:
*Average PGM dollar prices decreased in Q4 platinum and palladium fell 6% and 8% respectively while rhodium fell 9%
*The rand weakened against the US dollar by 5% on average quarter-on-quarter
*Attributable production for the fourth quarter increased slightly quarter-on-quarter to 98. . . Full story | | Fiuranium announced that on 20 July 2012, all of the conditions precedent to the Gold One transaction (as defined below) had been satisfied or waived. Each of the parties have confirmed such in writing and the closing date, as defined in. . . Full story |
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Company Results | Dividend
A final ordinary dividend of 10cps has been declared.
Outlook
Management remain optimistic on the growth prospects of the group through continued diversification into new product development and ventures, with a focus on infrastructure development and expansion of the group's customer base. With. . . Full story | | Gross income from operations and investments for the interim period more than doubled to R72.4 million (2011: R32.7 million), while net income for the period attributable to equity shareholders soared to R53.7 million (2011: R19.1 million). Furthermore, headline earnings per share. . . Full story |
World Markets (Spot Prices)
Name | Time | RP | Move | % Move | JSE Overall | 17:00 | 33814.00 | -410.00 | -1.20% | JSE Top 40 | 17:00 | 29682.00 | -391.00 | -1.30% | JSE Gold | 17:00 | 2255.00 | 49.00 | 2.24% | JSE Financial | 17:00 | 26151.00 | -331.00 | -1.25% | JSE Industrial | 17:00 | 39283.00 | -326.00 | -0.82% | JSE Indust 25 | 17:00 | 33358.00 | -306.00 | -0.91% | JSE Resource | 17:00 | 45367.00 | -840.00 | -1.82% | DJ Futures | 19:58 | 12640.00 | -133.00 | -1.04% | DJ Ind | 19:58 | 12697.88 | -124.69 | -0.97% | SP 500 | 19:58 | 1347.97 | -14.69 | -1.08% | Nasdaq | 19:58 | 2884.84 | -40.46 | -1.38% | FTSE 100 | 17:35 | 5533.87 | -117.90 | -2.09% | DAX | 18:08 | 6419.33 | -339.06 | -5.02% | CAC40 | 18:08 | 3101.53 | -92.36 | -2.89% | Nikkei | 08:12 | 8508.32 | -161.55 | -1.86% | Shanghai | 09:28 | 2141.40 | -27.24 | -1.26% | Hang-Seng | 10:42 | 19053.47 | -587.33 | -2.99% | All Ords | 08:40 | 4159.20 | -71.40 | -1.69% | NZSE 50 | 07:48 | 3465.36 | 1.66 | 0.05% |
| | Name | Time | RP | Move | % Move | Gold $ | 19:58 | 1576.51 | -3.80 | -0.24% | Gold R | 19:57 | 13308.12 | 234.41 | 1.79% | Gold R/kg | 19:58 | 427874 | 8233 | 1.96% | Silver $ | 19:58 | 27.0420 | -.1280 | -0.47% | Platinum $ | 19:58 | 1396.50 | -9.50 | -0.68% | Palladium $ | 19:58 | 569.80 | -4.20 | -0.73% | R157 | 19:56 | 5.45 | .07 | 1.30% | R204 | 10:42 | 6.22 | .02 | 0.32% | Brent Crude | 19:58 | 105.30 | -.02 | -0.02% | Rand / Dollar | 19:58 | 8.4432 | 0.1698 | 2.05% | Rand / Pound | 19:55 | 13.0686 | 0.1741 | 1.35% | Rand / Euro | 19:55 | 10.2328 | 0.1929 | 1.92% | Rand / NZD | 19:57 | 6.6563 | 0.0529 | 0.80% | Rand / AUD | 19:55 | 8.6725 | 0.0897 | 1.05% | Yen / Dollar | 19:58 | 78.4370 | -0.0070 | -0.01% | Euro / Dollar | 19:55 | 0.8246 | -0.0003 | -0.04% | Dollar / Euro | 19:58 | 1.2121 | -0.0001 | -0.01% | Pound / Dollar | 19:55 | 0.6441 | 0.0036 | 0.56% |
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Click here for the Sharenet Spot Price page
The JSE Today
Trading Statistics
Date | Adv. | Decl. | Unch. | Actives | Volume | Value | Trades | Orders |
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23/07/2012 | 117 | 238 | 61 | 416 | 155,918,500 | R8,307,458,648 | 86975 | 1504917 | 20/07/2012 | 183 | 150 | 68 | 401 | 166,196,582 | R9,521,065,826 | 85415 | 1310481 | 19/07/2012 | 206 | 142 | 77 | 425 | 218,070,021 | R10,856,710,297 | 105667 | 1327517 | 18/07/2012 | 178 | 141 | 73 | 392 | 175,256,273 | R9,140,814,745 | 89022 | 1243886 | 17/07/2012 | 147 | 173 | 78 | 398 | 147,810,465 | R7,984,898,566 | 78010 | 1203313 |
* Includes all listed instruments on the JSE
Index Summary Index Name | RP | Move | % Move | Top 40 | 29,682.00 | -391.00 | -1.30% | Industrial | 39,283.00 | -326.00 | -0.82% | Mid Cap | 49,779.00 | -373.00 | -0.75% | Small Cap | 36,662.00 | -183.00 | -0.50% | Resource 20 | 45,367.00 | -840.00 | -1.82% | Industrial 25 | 33,358.00 | -306.00 | -0.91% | Financial 15 | 9,749.00 | -138.00 | -1.40% | Financial & Ind. 30 | 36,832.00 | -394.00 | -1.06% | All Share | 33,814.00 | -410.00 | -1.20% | Oil & Gas | 25,759.00 | -484.00 | -1.85% | Mining | 29,128.00 | -515.00 | -1.74% | Gold Mining | 2,255.00 | 49.00 | 2.24% | Platinum Mining | 46.00 | .00 | -1.62% | GENERAL MINING | 7,526.00 | -183.00 | -2.38% | Oil & Gas Producers | 13,850.00 | -260.00 | -1.85% | Basic Materials | 25,091.00 | -457.00 | -1.79% | Chemicals | 14,962.00 | -29.00 | -0.20% | Forestry & Paper | 13,763.00 | -210.00 | -1.51% | Industrial Metals | 29,026.00 | -1034.00 | -3.44% | Industrials | 33,050.00 | -285.00 | -0.86% | General Industrials | 94.00 | .00 | 0.44% | Consumer Goods | 33,914.00 | 1.00 | 0.00% | Automobiles & Parts | 5,930.00 | -67.00 | -1.12% | Household Goods | 157.00 | 0 | -0.16% | Health Care | 45,994.00 | -141.00 | -0.31% | Beverages | 119.00 | .00 | 0.50% |
| | Index Name | RP | Move | % Move | Food Producers | 63,112.00 | 13.00 | 0.02% | Personal Goods | 446.00 | .00 | 0.01% | Consumer Services | 69,863.00 | -654.00 | -0.93% | General Retailers | 59,953.00 | -611.00 | -1.01% | Travel & Leisure | 4,010.00 | 11.00 | 0.28% | Media | 97.00 | -1.00 | -1.47% | Support Services | 2,289.00 | -18.00 | -0.81% | Telecommunications | 68,596.00 | -1773.00 | -2.52% | Financials | 26,151.00 | -331.00 | -1.25% | Banks | 48,063.00 | -353.00 | -0.73% | Non-life Insurance | 42,068.00 | 238.00 | 0.57% | Life Insurance | 20,821.00 | -499.00 | -2.34% | General Financial | 2,413.00 | -80.00 | -3.22% | Technology | 29,923.00 | -102.00 | -0.34% | SHARIAH TOP40 | 2,873.00 | -48 | -1.65% | FTSE/JSE SHARIAH ALL | 3,008.00 | -46 | -1.53% | COAL MINING | 21,421.00 | -981 | -4.38% | FTSE JSE Fledgling | 5,440.00 | 7 | 0.13% | FTSE/JSE Alt X | 1,098.00 | 2 | 0.22% | SA LISTED PROPERTY | 480.00 | | -0.05% | CAPPED PROPERTY | 382.00 | | -0.25% | RESOURCE | 25,021.00 | -446 | -1.75% | DIVIDEND PLUS | 190.00 | -2 | -1.05% | FTSE/JSE RAFI 40 | 6,912.00 | -108 | -1.54% | Capped Top 40 | 15,682.00 | -204 | -1.28% | Capped All Share | 17,108.00 | -206 | -1.20% | JSE TABACO | 5,528.00 | -52 | -0.93% |
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Click here for the Sharenet Index Summary page
Latest Consensus Changes** Code | Company Name | Status | Updated | MST | MUSTEK LIMITED | BUY | 19 Jul | IPL | IMPERIAL HOLDINGS LTD | HOLD | 19 Jul | RLO | REUNERT LIMITED | SELL | 19 Jul | ALT | ALLIED TECHNOLOGIES LIMIT... | HOLD | 19 Jul | BIL | BHP BILLITON PLC | BUY | 19 Jul |
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Results Expected** Expected | Company Name | Fin. Date | 25 Jul 2012 | AECI | June 2012 (Interim) | 25 Jul 2012 | AECI 5.5%P | June 2012 (Interim) | 25 Jul 2012 | BATS | June 2012 (Interim) | 25 Jul 2012 | SABVEST | June 2012 (Interim) | 25 Jul 2012 | SABVEST-N | June 2012 (Interim) |
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Recent Dividends** Share Name | Dec-Date | LDT | Pay-Date | Amount | KUMBA | 12-07-20 | 12-08-10 | 12-08-20 | R 19.2000 | SYNERGY B | 12-07-19 | 12-08-02 | 12-08-13 | R 0.1953 | MAS | 12-07-19 | 12-08-02 | 12-08-17 | R 0.0160 | SYNERGY A | 12-07-19 | 12-08-02 | 12-08-13 | R 0.4422 | SBR003 | 12-07-13 | 12-07-27 | 12-08-06 | R 1.4800 |
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Ex Div** Share Name | Dec-Date | LDT | Pay-Date | Amount | OMNIA | 12-06-26 | 12-07-20 | 12-07-30 | R 1.8000 | PERGRIN | 12-06-07 | 12-07-20 | 12-07-30 | R 0.7200 | PERGRIN | 12-06-07 | 12-07-20 | 12-07-30 | R 0.4533 | INVLTD | 12-05-17 | 12-07-20 | 12-08-06 | R 0.0900 | INVPLC | 12-05-17 | 12-07-20 | 12-08-06 | R 0.0900 |
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Upcoming AGMs** Code | Company Name | Date | Status | OAS | Oasis Crescent Property Fund | 23/07/2012 | Confirmed | SNV | Santova Ltd. | 24/07/2012 | Confirmed | IFC | IFCA Technologies Ltd. | 24/07/2012 | Confirmed | MDC | Mediclinic International Ltd. | 26/07/2012 | Confirmed | TON | Tongaat Hulett Ltd. | 27/07/2012 | Confirmed |
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