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Coronation Market Plus Fund review 2022

Coronation market plus fund

The Coronation Market Plus Fund invests in a diverse portfolio with an emphasis on long-term capital growth. The fund makes investments in cash, bonds, real estate, and stocks both domestically and abroad. Since its inception, the Coronation Market Plus Fund has generated above-average returns, and for many years has been regarded as a successful long-term investment.

Due to its greater balance and reliance on interest payments rather than just share gains and dividends, the fund is less unpredictable than one that invests exclusively in shares. Since the fund is more steady and pursues a less demanding benchmark, it cannot gain as much as a fund that solely invests in equities.

But this does not imply that the fund is a viable choice for investors with short-term goals. A  large portion of the fund invests in stocks and generates returns that are above average, it is nevertheless volatile. The target for the fund is CPI + 5%, which is a very challenging standard to achieve. The fund seeks to outperform, or at the very least match, its benchmark over the long term.

When considering the fund’s overall performance, the Coronation Market Plus Fund has been able to outperform the benchmark. Since its inception, it has been able to grow the fund by 1601.9%, with CPI + 5% increasing by 730.2% during that time. As a result, the fund has outperformed the benchmark by 871.70% since its inception.

One of South Africa’s top-performing diversified unit trusts is the Coronation Market Plus Fund. The fund has succeeded in producing returns that are exceptional. Read the analysis of the fund that follows before making an investment.

Coronation Market Plus Fund summary 

The Coronation Market Plus Fund is a unit trust that was established on July 2, 2001. Since its inception, the fund has grown by 1601.90%. A R1000.00 investment in the fund would therefore be worth R16,019.00 if invested from July 2001 to April 2022.

The fund makes investments in a variety of assets, with equities making up the largest portion of the portfolio. The fund has both domestic and foreign investments. The Coronation Market Plus Fund’s valuation as of March 2022 is R4.33 billion. The fund’s units are each priced at R95,43.

There is a minimum contribution requirement before money can be invested in the fund. A lump sum investment of R5,000.00 is the minimum required by the fund. Making regular monthly contributions to the fund is another way to invest. The minimum monthly payment is R500.00.

Three experienced fund managers who are well-known in the sector oversee investments in the fund. The fund managers are Neville Chester, Nicholas Stein, and Nicholas Hops. The fund has been well-diversified as of March 2022. The following investments were made by the fund:

  • Local equities to the value of 56.5% of the fund, 
  • local preference shares and other securities, which amount to 0.30% of the fund, 
  • Foreign equities, which account for 17.90% of the fund, 
  • Local real estate, which accounts for 6% of the fund, 
  • Local bonds, which account for 15.8% of the fund,
  • Foreign real estate, which accounts for 0.60% of the fund, 
  • Local cash which accounts for 0.40% of the fund, and
  • Foreign bonds amount to 2.60% of the fund. 

The majority of the fund’s investments have been made in shares, with bonds coming in second. Below is a summary of the top 10 holdings of the fund, which will help you better understand how the investment in assets is allocated.

Top 10 Holdings for the Coronation Market Plus Fund 2022

#Company or investment Percentage of fund
1Prosus4.70%
2Anglo American Plc4.40%
3Standard Bank Group Ltd3.40%
4Nedbank Group Ltd3.10%
5AngloGold Ashanti Limited 3%
6British American Tobacco Plc2.90%
7Glencore Xstrata Plc2.70%
8Redefine Income fund 2.30%
9Momentum Metropolitan Holdings2.10%
10Exxaro Resources Ltd 1.80%

How the Coronation Market Plus Fund works

Long-term investors are the target market for the Coronation Market Plus Fund. As short-term investments might not be as profitable, the fund urges investors to invest for at least five years. The investor will be able to maintain the investment’s purchasing power and earn more on its actual value in this way.

The investor will need to select an investment vehicle before making a fund investment. Investments for pension purposes, such as retirement annuities, endowments, and living annuities, cannot be made through the fund since it does not comply with Regulation 28 of the Pension Fund Act.

One must invest the minimum investment required when investing in the fund. Regular investments, tax-free savings accounts, and other options are available for placing investments. A minimum investment duration of five years is required for investors to receive the maximum interest rate.

There are expenses associated with investing in the Coronation Market plus fund. The annual management fee is the expense that is most recognised. 2022 has a set annual management fee of 1.25%. Other fees related to the investment include the total expense ratio and transaction costs, both of which rise annually.

Advantages of the Coronation Market Plus Fund 

  • The fund outperforms its set benchmark of CPI + 5%.
  • Long-term investors ( those that invest for 5 or more years) tend to earn more interest on their investments. 
  • The fund is more diversified than share-only unit trusts, which are more volatile. 
  • Fees levied on the fund are low considering the earnings that the fund achieves. 
  • Minimum contributions to the fund are low. 
  • The fund can be purchased remotely. 

Disadvantages of the Coronation Market Plus Fund 

  • The fund is not Regulation 28 compliant. Therefore, pension investments are not supported by the fund. 
  • The fund doesn’t have any capital guarantees. 

Conclusion 

In comparison to an all-share investing unit trust, the Coronation market plus fund offers a more well-rounded investment. Even if the fund is less volatile, a short-term investor would not be a good fit. Long-term investors typically reap greater rewards from the fund since it outperforms inflation over time and generates returns higher than the rate of inflation.

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