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Coronation Global Emerging Markets Flexible ZAR Fund review 2022

Published by
Lethabo Ntsoane

For those who feel comfortable with complete exposure to equities in emerging markets, the Coronation Global Emerging Markets Flexible ZAR fund is a good option. The fund primarily invests in Africa, Asia, and South America and only makes investments in emerging markets. 96.3 % of the fund’s investments are in stocks, with the remaining funds being held in cash in various currencies.

The fund is categorized as an aggressive fund for risk due to the high investment risk. Primarily short- to medium-term risk exists. As a result, the fund urges clients to hold their investments for at least 10 years in order to realise favourable returns. Those that want to invest for a lesser period can invest in other Coronation-managed unit trusts that are designed for short to medium-term investments such as the Coronation Jibar Plus Fund

Equity investment is typically a volatile endeavour. The fund is less concentrated than other equities-focused funds, nevertheless. For instance, a fund might concentrate solely on JSE-listed stocks by exclusively investing in JSE-listed stocks. On the other hand, the Global Emerging Markets Flexible fund diversifies risk by purchasing a wide variety of emerging market stocks on several stock exchanges.

Coronation has ensured that it employs well-vested employees to administer the fund since the fund invests in a variety of markets. Gavin Joubert, Suhail Suleman, Iakovos Mekios, Lisa Haakaman, and Paul Neethlong are currently in charge of managing the fund. These managers hold various credentials that complement one another and are well-versed in investments in emerging regions. 

It is possible to take advantage of the special investing opportunity provided by the Coronation Emerging Markets Flexible fund. We have included a thorough overview of the fund below for your benefit.

Coronation Emerging Markets Flexible ZAR Fund summary

The Coronation Emerging Markets Flexible fund is a unit trust that invests in emerging markets across the globe. Most of the fund is invested in Asian equity markets. The fund was launched on December 28th, 2007. As of 2022, the fund is valued at R4.62 billion. Each unit is sold at R2.45. 

The fund has its benchmark as the MSCI Emerging Markets Index, which the fund aims to outperform or at least match. The fund hasn’t managed to outperform the benchmark set. Since its inception, the Coronation Emerging Markets Flexible fund has grown by 153.2%.

On the other hand, the Coronation Emerging Markets Flexible fund’s benchmark has managed to grow by 186.6% during the same period. On average, the benchmark recorded an increase of 7.6% as compared to the fund’s annual average increase of 6.7%. 

The fund has been outperformed by an annual average of 0.9% and an all-time of 33.4%. As much as the fund has been outperformed by its benchmark, it was still able to perform well. An average annual increase of 6.7% is very high and can sometimes be achieved by CD and money market instruments if a high lump sum is contributed. 

The Coronation Emerging Markets Flexible fund only needs an R500 minimum monthly investment or an R5,000 minimum one-time investment. Due to this, even those with small amounts of capital to invest can afford the fund.

The amount of money invested can change quickly. For instance, between March 2009 and February 2010, the fund attained a maximum yearly rise of 49.7 %. The fund, on the other hand, had an all-time yearly low of 37.5 % from March 2008 to February 2009.

Investment returns are subject to ups and downs. An investor can anticipate generally favourable growth over a longer time frame. The fund must choose investments wisely if it hopes to experience positive growth.

We list the fund’s structure below to assist you in better comprehending it.

Coronation Emerging Markets Flexible ZAR Fund asset composition

ASSETAllocation %
Equities:
          China23.07%
          Brazil 12.38%
          India9.59%
          South Africa 9.50%
          South Korea9.35%
          Taiwan6.36%
          Germany4.44%
          France 4.23%
          United Kingdom3.83%
          Argentina 2. 28%
          Other11.26%
Cash
          USD2.35%
          ZAR0.49%
          HKD0%
          EUR(0.13)%
          Other0.91%
Real estate:
          Brazil 0.08%

The fund has most of its investments in China, which accounts for 23.07% of all investments. The fund doesn’t only invest in equities, it also invests in cash. Cash holdings fluctuate at a high rate. A small portion of the fund invests in real estate, which is only held in Brazil. 

For a further illustration of where the fund invests, we list all the major companies in which it has invested. The fund invests in the following companies. 

Top 10 holdings of the Coronation Emerging Markets Flexible ZAR Fund

#CompanyFund percentage
1JD.com Inc7.8%
2Prosus Na4.9%
3Taiwan Semiconductor Man4%
4Samsung 3.6%
5Housing Dev finance3.6%
6Naver Corp3.5%
7Petroleo Brasileiro SA3.3%
8AngloGold Ashanti Limited3.2%
9Anglo American Plc3.1%
10Sendas Distribuidora 2.7%

Advantages of the Coronation Emerging Markets Flexible ZAR Fund

  • The fund provides high returns for those that invest for the long term.
  • The fund outperforms its set benchmark from time to time.
  • There are two ways to make contributions to the fund.
  • The minimum contribution requirement is low.
  • An investment in the fund can be done remotely.

Disadvantages of the Coronation Emerging Markets Flexible ZAR fund

  • The fund doesn’t comply with Regulation 28 of the Pension Funds Act 24 of 1956.
  • Short-term investments risk a capital loss.

Conclusion

When investing in the fund, an investment horizon of not less than 10 years must be kept in mind. The fund has its ups and downs throughout, and short-term investments are likely to get affected by these market performances. The fund absorbs lows in the long run and a long-term investor is likely to get above-average returns on investment. 

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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
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