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Coronation property equity fund review 2022

Published by
Lethabo Ntsoane

The Coronation Property Equity Fund makes investments in real estate firms that are JSE-listed. The fund focuses on businesses that own, manage, and develop real estate. This fund carries a high level of risk for the investor and is best suited for those looking to make long-term investments. It may be difficult for short-term investors to generate interest from their investments.

The fund carries a high level of investment risk. The fund has been rated as having a high risk of 8 out of 10 by Coronation. Wherever there is a great risk of investment, there is also a high opportunity for reward. For those who desire to invest for the long term, large returns are available.

The product is appropriate for investors who want to put their money in a portfolio that is heavily weighted toward real estate stocks. The fund is entirely made up of investments in real estate. The investments are all made for JSE-listed businesses. The mission of the fund, however, indicates that investments will be made in firms with foreign ownership but with JSE listings.

Since the fund only invests in stocks, it is quite volatile. For significant returns on investments, the fund has advised investors to hold their equity for at least three years or longer. The fund’s swings can have an impact on short-term investments. If withdrawn too soon, short-term investments may potentially forfeit earnings like dividends.

The Coronation Property Equity Fund offers investors numerous ways to make money. To better comprehend the fund as we go deeper into it, you should read on before making an investment.

More information on the fund is provided below.

Coronation property equity fund summary

The Coronation property equity fund is a unit trust that requires a minimum monthly deposit of R500.00. A minimum investment of R5,000.00 is required for people who want to contribute to the fund in one single sum. As of May 2022, each unit costs R33.89. The fund’s current market value is R879.28 million.

The JSE is where the fund’s primary investments are, and it solely buys equities in real estate companies. Companies that manage, own, and develop real estate are among the companies in which the fund invests. By investing in real estate stocks, the fund has successfully used the capital invested while providing investors with substantial returns. 

As of 2022, the fund has been around for 21 years since its inception on November 20, 2000. The fund has been able to increase by 1151.1 % since its establishment. The benchmark has increased by 1232.7 % during the same 21-year period. By 81.5 %, the benchmark has outperformed the fund.

The FTSE/JSE All Property Share Index is followed by the fund. In comparison to the Coronation property equity fund’s 12.5 % average performance, the FTSE/JSE All Property Share Index has seen a yearly average gain of 12.8%. Even though the fund underperformed its benchmark, investors nonetheless saw fantastic returns since the fund managed to expand significantly.

This kind of growth is only possible with excellent investing methods. Although the fund invests in many real estate stocks, these are its top 10 holdings.

Coronation property equity fund’s top 10 holdings

#Company NameFund percentage
1Growthpoint Properties Ltd13.9%
2NEPI Rockcastle Plc13.6%
3Equities Property Fund Ltd9.2%
4Redefine Income fund8.7%
5Fortress Income Fund Ltd A8%
6Mas real estate inc6.9%
7Vukile Property Ltd 5.2%
8Atterbury Investment Holdings 5.2%
9Investec limited 4.3%
10Hyprop Investments Ltd 3.5%

How the Coronation property equity fund works

Only people who have no plans to invest using a retirement vehicle are eligible to invest in the Coronation property equity fund. This is a result of the fund’s not complying with Regulation 28. According to Regulation 28 of the Pension Funds Act 24 of 1956, equity investments cannot make up more than 75% of a pension investment’s portfolio.

In light of the circumstances, only non-retirement investments may be made into the fund. One will therefore need to decide on the type of investment they intend to make. A deposit must be made after selecting the investment type. A deposit can be made either regularly for R500 or more or once for R5,000.

A team of managers will oversee the investment as selected by Coronation. Mauro Longano and Anton De Goede are the fund managers at the moment. Charges are made to manage the fund. The fund levies a 1.25% annual management fee, excluding VAT.

There are other fees, such as fund costs and transaction costs. A total of 1.52 % is charged for these expenses. VAT for the charges is also included in the price.

Advantages of the Coronation Property Equity fund

  • The fund tends to show high returns on investment in the long run.
  • Investments in the fund are easy as they can be done in a number of ways.
  • There are two methods of depositing money for the purpose of investing.
  • The fund invests in companies that are well established.
  • The fund has been in existence for over 20 years, which provides a long timeline to follow for investment purposes.

Disadvantages of the Coronation Property Equity Fund

  • The fund’s volatility puts an investor’s short-term capital at risk.
  • Investment capital is not guaranteed.
  • The fund does not adhere to Regulation 28.

Conclusion

A long-term investor who wishes to increase their capital would do well by investing in the Coronation property equity fund. It’s possible that the investment will produce favourable returns that outperform inflation. Keep in mind that the fund only finances JSE-listed businesses that possess, oversee, or develop real estate.

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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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