Coronation Capital Plus Fund review 2023

The Coronation Capital Plus Fund is one of Coronation’s top-performing unit trusts in South Africa. The fund offers clients a moderate level of risk while making balanced investments in a variety of assets. The fund has established a 70% cap on growth assets, such as stocks, and a 30% cap on income assets.

Since its inception, the fund has been able to sustain growth and has never let investors down. In comparison to the performance of the other Coronation Funds, Coronation Capital Plus has managed to record growth of 807.2% since its inception. This is due to the fund’s emphasis on long-term and medium-term investments.

To get favourable returns on investments, the fund advises investors to hold their investments for a period of at least 3 years. The investment has a greater ability to weather downturns on long-term investments and is known to be less volatile than short-term interest-targeting funds. However, due to the investment’s tendency to fluctuate over a brief period of time, short-term investors may run the risk of losing their money.

The fund can be used by those who want to buy living annuities, but they must use it cautiously. Withdrawals from the living annuity need to be carefully tracked and planned. Short-term withdrawals from a living annuity may set it back in potential earnings. As such, withdrawals should be made over a longer period.

One of the most effective funds to invest in is the Coronation Capital Plus Fund. Continue reading the discussion to learn how to make a smart investment for yourself before you start investing in the fund. The fund is covered in more detail below.

Coronation Capital Plus Fund summary

A unit trust named The Coronation Capital Plus Fund was established on July 2, 2001. The investment philosophy used by the fund has allowed it to perform quite well. For investing purposes, Coronation Capital Plus Fund has established the following threshold:

• A limit of 70% investment in growth assets such as stocks, and
• A limit of 30% investment in income assets.

With the exception of 2002 and 2003, the fund has outperformed its ambitious benchmark of CPI+4% since its inception. It has grown by 807.20%, beating the benchmark’s rise of 586.60% over the same time period since its inception. The average performance of the peer group, which was 832.90%, unfortunately, outperformed the fund.

The price per unit has increased along with the fund’s ability to increase capital over time. The fund charges R46.25 for each unit it sells. At the moment, the fund is worth R13.29 billion. Since its start, the fund has experienced an average yearly growth of 11.1%, which is significant considering how few investments can offer such returns.

To achieve its earnings, the fund invests in a number of assets. The fund invests in the following assets:

• Local equities investments which amount to 40% of the portfolio,
• Local bonds investments which account for 25.50% of the portfolio,
• Foreign equities investments, which amount to 19.60% of the fund,
• Local real estate investments which amount to 3.2% of the fund,
• Local cash investments which amount to 3.50% of the fund,
• Foreign cash investments which amount to 3.80% of the fund,
• Local commodities investment which amounts to 2.10% of the fund,
• Foreign bonds investments which account for 3% of the fund,
• Local currency futures to the value of 1% of the fund,
• Foreign real estate investments, which account for 0.10% of the fund, and
• Foreign commodities investments, which account for 0.20% of the fund.

The fund includes holdings in numerous industries. The fund’s top 10 holdings are presented below for your better understanding. 

Top 10 Holdings of the Coronation Capital Plus Fund

How the Coronation Capital Plus Fund works

The Coronation Capital Plus Fund recommends that investors hold their investments for at least 3 years.  The fund favours long-term investments since they produce better returns than medium-term and short-term investments.

The fund allows retirement-based investments since it complies with Regulation 28 of the Pension Fund Act. The fund accepts investments from retirement annuities, living annuities, endowments, and preservation funds.

A vehicle for investing must be used in conjunction with a contribution to the fund. The fund can be utilized with a variety of investment vehicles. Among the investment vehicles that can be used are retirement investment vehicles and tax-free savings accounts.

Minimum contributions must be made to the fund for the investment to be made through an investment vehicle. The minimum investment into the fund is R5,000.00 in one lump payment or R500.00 in debit order contributions. Thus, either contribution method may be utilized.

Fees for managing, conducting, and placing investments are also included with the investment. The fund currently charges an annual management fee of 1.15%. When investing in the fund, there are additional fees as well, such as transaction fees and fund charges.

Advantages of the Coronation Capital Plus Fund

• The investors do not need to manage their investments as there are fund managers.
• The fund tends to grow in the medium and long term.
• Minimum contributions to the fund are low.
• The fund tracks a very ambitious benchmark and outperforms it.
• Fees associated with the investment in the fund are reasonable.
• The fund is Regulation 28 compliant meaning retirement investments are eligible to invest in the fund.
• The fund can be purchased remotely.

Disadvantages of the Coronation Capital Plus Fund

• The fund fluctuates over a short period of time and can record lows of 12.8%.
• Capital that is invested in the fund is not guaranteed.

Conclusion

Since its inception, the Coronation Capital Plus Fund has provided investors with returns that are above average. The fund follows an ambitious benchmark that it outperforms, yet it has moderate risk on investment.