In my view, those are poor performing funds for long term. If you actively invest in funds that are relatively immune to market downturns such as non cyclical stocks that I will mention bellow.
The STX40 has only averaged 7% pa since 2008. That is in my mind a poor performance compared to the the stocks that are immune to corrections. On long term, you will exceed 36% pa that these stocks have been achieving for years.
EOH
NPN
SHP
TRU
This is not advice to you but my own advice to me. Pity I never listened.
Some returns (excluding dividends) to compare. Note that return indicated is not the annualised return, but the total return for the period.
STX40
1 year - 9.41%
3 Year - 52.95%
5 Year - 87.62%
10 Year - 322.18%
SHP
1 Year - Minus 13.07%
3 Year - 37.37%
5 Year - 149.66%
10 Year - 1276.23%
EOH
1 year - 32.37%
3 Year - 374.10%
5 Year - 1138.43%
10 Year - 2769.87%
TRU
1 Year - Minus 21.35%
3 Year - Minus 5.86
5 Year - 67.78%
10 Year - 439.67
NPN
1 Year - 46.16%
3 Year - 261.23%
5 Year - 382.56%
10 Year - 2342.42%
REM
1 Year - 23.77%
3 Year - 109.94%
5 Year - 174.98%
10 Year - 736.02%
I have included my favourate "buy and forget" share (Remgro) for interests sake. Not as the returns indicated exluded dividends and the unbundlings, Remgro's return will be understated.
I do find it interesting, that of the 4 shares listed by Orca's, only 2 outperformed the STX40 over a 1 year horizon. The other had negative returns....
Over the longer periods, the outperformance on the selected shares are highlighted..... Questions to be asked by any investor (in particular any casual investor).
1. Can these long term returns be replicated into the future, and if so, for how long. Certainly mathematically, they would eventually return to the market mean. In the case of SHP and TRU, the negative returns over the short term are worrying and may be indicative of this effect.
2. Can an individual investor afford the volatility of individual shares. Or does he need a safety net of "buying the market"? This will differ from person to person depending on his level of knowledge and aptitude to risk.
My take on the 4 shares listed (NPN, SHP, EOH and TRU), is that they will NOT come close to a 36% per annum return (over the long term). I think that there are opportunities in SHP. I'm not confident in TRU and NPN (although NPN offshore investments are certainly interesting). EOH, i'm not familiar enough with the fundamentals to comment on.
Key to material outperformance over the market, it to find the next winner, not the last winner. That's not an easy task.....
Matter of interest, my personal SA portfolio is as follows
CLI
MPC
REM
JSE
SOL
With smaller holdings in
CML
CPI
ILA
PNC
Some of the positions were taken with a specific view and have served there purpose. Overall, my portfolio is in need of re-balancing, but i tend to do that in January/February (when i have a better view on my tax position). Return over the last 10 years returns hasn't been too shabby, showing a annualised growth (including dividends) of 23.6%.
