The Coronation Industrial Fund invests in industries that are listed on the Johannesburg Stock Exchange. However, the fund doesn’t invest in all industries as it deliberately excludes mining and financial services industry investments.
The fund also invests in foreign industries that are listed on the JSE. However, foreign mining and financial services industries are excluded. The fund dedicates 100% of its funds to investments in equities on the JSE, in specific industries.
The fund works to maximize the investor’s capital over a long period. Hence, Coronation specifically asks investors to hold their investments in the fund for at least 5 years. This is because the fund tends to be volatile over a short period of time and is able to absorb losses over the long term.
These facts can be witnessed through the historic performance of the fund. The fund tracks the FTSE/JSE Industrial Index, which is known to outperform the South African inflation rate. The Coronation Industrial Fund has managed to outperform the benchmark as a result, creating above-average returns for investors.
An investment in the Coronation Industrial Fund comes with a high level of risk. The fund has been rated 9 out of 10 when it comes to risk, which renders the fund aggressive. As an aggressive fund, it can work for any type of investor, provided they know what they are getting themselves into.
The Coronation Industrial Fund is a very diverse fund, yet it is focused on investing in specific industries. Before investing in the fund, it is ideal to understand and analyse the fund. We provide a detailed analysis of the fund below.
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The Coronation Industrial Fund is a unit trust that is managed by Tumisho Motlanthe and Nicholas Hops, who specialize in industrial investments. The fund was launched on July 1st, 1998 and has been managed by different individuals over the course of its existence.
Coronation Industrial Fund requires a minimum contribution of R5,000.00 for once-off contributions or R500.00 for monthly debit order contributions. As of 2022, the fund is valued at R660.74 million and each unit is priced at R193.65.
The fund has set the FTSE/JSE industrial index as its benchmark. The fund has been able to outperform the set benchmark since its inception, except for a few months in the year 2000.
Since its inception, the fund has managed to record a growth of 2861.5% and averaged an annual increase of 15.2%. The benchmark, on the other hand, has managed to record a 1734% increase over the same period and an average 12.9% annual increase.
The fund has managed to outperform the benchmark by 1127.4% since its inception. This makes the fund a high-performance fund. However, the fund is volatile and has recorded an annual low of 26.3% between December 2017 and November 2018.
But the fund has also recorded highs that are mind-blowing. The fund’s highest annual return is 68%, which was recorded between January 1999 and December 1999. The performance is made possible by the investment philosophy applied by the fund managers.
As of 2022, the fund invests in the following industries:
|Name of Equity/industry||Portfolio %|
To better understand where the fund invests its portfolio, we have listed the top 10 holdings that the fund has. The top 10 holdings are listed below.
|1||Compagnie Financiere Richemont SA||13.2%|
|3||MTN Group Ltd||12%|
|4||British American Tobacco Plc||7.3%|
|6||Aspen Pharmacare Holdings Ltd||5.2%|
|7||Anheuser – Busch Inbev SA/NV||4.6%|
|8||Spar Group Ltd||4.3%|
|9||Motus Holdings Ltd||2.9%|
|10||Textainer Group Holdings Ltd||2.9%|
The fund is suitable for long-term investors. Unfortunately, the fund doesn’t allow investments for retirement purposes, which last for decades in nature.
This is because 100% of the fund invests in equities and Regulation 28 of the Pension Funds Act only permits retirement investments in funds that invest 75% or less of their portfolio in equities. Therefore, retirement annuities and endowments cannot be invested in the fund.
An investment in the fund should be made by investing at least R500.00 per month or R5,000.00 once off. A combination of both methods of contribution can be made. The money contributed will be directed to the purchase of units of the fund. Currently, a unit is priced at R193.65.
The fund’s performance will either increase or decrease a person’s capital. The fund charges a fixed annual management fee of 1% (VAT exclusive). Other fees levied include transaction costs and fund expenses.
An investment in the Coronation Industrial Fund works well for those that want to invest for the long term. The fund tends to produce better results for those that invest for a period of not less than 5 years. Those that want to invest for the short term should avoid the fund and look for a fund that invests more in bonds and other money market instruments.