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Coronation Equity Select ZAR feeder fund review 2022

Published by
Lethabo Ntsoane

As an alternative to the Coronation Equity Select Fund, which requires investments to be made in US dollars, there is the Coronation Equity Select ZAR feeder fund. The minimum investment amount required by the fund is modest. When investing in the fund, you must make a minimum commitment of R5,000.00 or R500.00 per month.

Those who have a job and a monthly income but don’t have a large sum of money to invest can use this option because the minimum investment is low. It is clear who should invest in the fund, and it is not fit for all investors. This fund is designed for people who want to invest in stocks in emerging and developed markets.

The fund gives investments in developed market equities a higher priority than investments in developing market equities. By acquiring shares in businesses in both developed and developing regions, the fund aims to increase its investment returns over the long term.

The mandate of the fund is that at least 70% of the fund be invested in developing markets. As a result, more than 70% of the fund will always be allocated to investments in developing markets. The fund may invest up to 30% of its total assets in shares of developing market companies.

The fund doesn’t just invest in stocks. The fund can hold bonds and cash, but only to a certain extent. The percentage of the fund that can be invested in bonds and cash is 20%. This occasionally makes the fund diversified.

Considering the businesses it invests in, the fund is highly intriguing. To get started, you can utilize a Coronation investment vehicle to benefit from taxes or exclusions for income tax purposes.

Before you begin using the fund, keep reading since we will go into more detail about the fund below.

Coronation Global Equity Select ZAR feeder Fund summary

The unit trust Coronation Global Equity Select ZAR feeder invests in stocks from both emerging and developed markets. The majority of the fund is invested in North America, and technology shares make up the majority of the fund’s portfolio.

The fund is valued at R843.66 million as of 2022, and each unit is being sold for R1.55. Each unit’s price and value vary according to the success of the fund. The MSCI All Country World Index has been set as the fund’s benchmark.

The benchmark established is highly aggressive, and the fund intends to perform at or above the benchmark over a period of five years. According to historical statistics on the fund, it has grown by 54.6% from its start on April 30, 2015. The fund has experienced a 6.3% yearly growth.

Since the launch of the Coronation Global Equity Select ZAR feeder fund, the benchmark has also done well. It was able to achieve a growth of 126.7% between 2015 and 2022. Consequently, the benchmark had an average yearly growth of 12.2 %.

Since its debut, the fund was outperformed its benchmark. However, the growth of the fund is not average; in fact, it has done well in light of the recent gloomy market. The fund’s all-time yearly low of 18.8 %, which occurred between May 2021 and April 2022, has been reported.

The fund is engineered to generate above-average results over a long period of time. Therefore, since the fund is still young, there is more to expect from the fund in the future. 

For the fund to achieve well, it has to make sound decisions. In doing so, it also has to carry out its mandate. Currently, the fund invests in the following countries or continents. 

Coronation Global Equity Select ZAR feeder fund asset allocation

LocationFund exposure
North America 66.7%
Asia18.4%
Europe14.6%
South Africa0.3%

The majority of the fund’s investments are in industrialized nations. The substantial investment levels in North America and Europe demonstrate this. 81.3 % of the fund is made up of investments in both North America and Europe. The fund hasn’t been able to provide significant returns in recent months because the majority of the equities from the areas have been on the decline.

We provide you with a clearer understanding of the fund by listing the top 10 businesses that the fund invests in. The table below shows the firms and investments as a proportion of the fund.

Top 10 holdings of the Coronation Global Equity Select ZAR feeder fund

#Company Fund percentage
1Canadian Pacific Railway Ltd6.1%
2Charter Communication A5.2%
3Alphabet Inc5.2%
4Visa Inc4.6%
5JD.com Inc Adr4.4%
6Amazon.com Inc4.3%
7Prosus Na3.7%
8Canadian National Railway Co3.4%
9Microsoft Corp2.9%
10Facebook Inc2.7%

Advantages of the Coronation Global Equity Select ZAR feeder Fund

  • The fund has two ways of making contributions.
  • The fund follows an ambitious benchmark that it aims to outperform.
  • Minimum contributions are low.
  • Long-term investments of 10 or more years are likely to provide above-average returns.
  • The fund invests in a wide range of equities which makes the fund less aggressive than a fund that is concentrated on a certain exchange.

Disadvantages of the Coronation Global Equity Select ZAR feeder fund

  • The fund doesn’t comply with Regulation 28 of the Pension Funds Act 24 of 1956.
  • Short-term investments risk the capital invested due to short to medium-term fluctuations.
  • Capital invested doesn’t come with any guarantees.

Conclusion

The Coronation Global Equity Select ZAR feeder fund is mainly for those that have other investments and are looking to invest in a fund that invests in global markets. This has to be taken as a long-term investment as the fund not only protects the capital over time but also provides favourable results. One can invest in the Coronation Jibar Plus Fund for short-term investments.

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Lethabo Ntsoane

Lethabo Ntsoane holds a Bachelors Degree in Accounting from the University of South Africa. He is a Financial Product commentator at Rateweb. He is an expect financial product analyst with years of experience in reviewing products and offering commentary. Lethabo majors in financial news, reviews and financial tips. He can be contacted at lethabo@rateweb.co.za

Published by
Lethabo Ntsoane
Tags: Coronation
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