Coronation Global Optimum Growth fund review 2022

Published by
Lethabo Ntsoane

The US dollar-quoted Coronation Global Optimum Growth fund makes investments in both emerging and industrialized markets. The investment is appropriate for people who want to invest internationally and in a variety of assets. The fund invests in a variety of assets, including cash, bonds, stocks, and commodities.

The fund uses some of Coronation’s best fund managers because of its wide portfolio. The money will be managed by competent managers, who will choose the course they believe is best. As a result, they will invest in a variety of assets and in different geographic locations.

Fees are charged on an annual basis for Coronation’s efforts. The most common expense that Coronation charges is the annual management fee. The fund’s annual management fee is 1.35 % as of 2022. Additional fees are required, along with fund expenditures including trading, custody, and audit fees that are incurred within the fund.

There are fees associated with transactions in the fund, called transaction expenses. Currently, transaction fees are charged at 0.16 % (VAT inclusive). JP Morgan serves as the fund’s trustees, further solidifying the fund’s reputation as one of the most reliable.

Although the Coronation Global Optimum Growth fund has short-term volatility, it can generate positive financial returns over the long term. Investors are advised by Coronation to keep their money in the fund for at least 10 years. Investors that want to invest money for a short-term profit can invest in other funds from Coronation, such as the Coronation Strategic Income Fund.

There are several reasons to use the Coronation Global Optimum Growth fund as an investment. To further explain how the fund functions and more, we will analyze it in more detail below.

Coronation Global Optimum Growth fund summary

The Coronation Global Optimum Growth fund is a unit trust that invests in developed and emerging markets. The benchmark for the fund is the US CPI + 4%, while its secondary benchmark is a composite consisting of 30% BGBA, 35% MSCI World, and 35% MSCI EM. The fund is risky and best suited for medium-to long-term investors.

The Coronation Global Optimum Growth fund has a value of $796.58 million as of July 2022. Since its inception in 1999, the fund has expanded. Since its inception, the fund has consistently outperformed the established benchmark. Since the fund’s inception, it has also been able to outpace US inflation by more than 5% annually.

The fund has grown by 502.1 % since its inception, which translates to an average yearly growth rate of 8.1%. Since the fund’s inception, the primary benchmark has increased by 340 percent, or an average annual growth of 6.6%. The US inflation rate increased by 76.2 % throughout that time, or an average of 2.5 % per year.

Since its inception, the fund has been able to outperform the main benchmark by 62.1%. In addition, it has consistently outperformed US inflation by an average of 5.6% every year. The fund is clearly successful based on its performance. Because the fund is quoted in US dollars, converting the money to ZAR will result in even greater growth.

Despite being widely diversified, the Coronation Global Optimum Growth fund has a high rate of volatility. Coronation advises investors to keep their investment in place for at least ten years. The historical performance of the fund demonstrates its volatility. From December 2007 to November 2008, the fund’s lowest yearly return, 49.2%, was achieved.

Great gains were also achieved by the fund’s ability to grow by a yearly percentage of 72.8. Between March 2009 and February 2010, this feat was accomplished. Months after the fund reported its enormous loss, it began to increase. This demonstrates how the fund can withstand severe losses and eventually turn them into profits.

To understand how the fund achieves these comebacks, we look at the asset allocation and where the fund invests below. 

Coronation Global Optimum Growth fund asset allocation

ASSETPORTFOLIO EXPOSURE
EQUITIES:79.1%
North America 32.3%
Europe21.4%
Asia13.1%
South Africa7.6%
Latin America 4.8%
COMMODITIES 2.8%
Europe2.8%
REAL ESTATE 0.4%
South Africa 0.1%
Latin America 0.1%
Europe0.1%
North America 0.1%
BONDS6.4%
South Africa6.4%
CASH11.3%
USD 7.6%
ZAR0%
Other3.8%

The fund has the majority of its assets in North America and Europe. A portion is held in Asia, Africa, and South America. The fund is clearly focused on investing in developed countries since the fund invests over 60% of the fund in developed countries. 

We list the top 10 stocks that the fund holds below. 

Top 10 holdings of the Coronation Global Optimum Growth fund

#Company Fund percentage
1JD.com Inc Adr4.2%
2Canadian Pacific Railway Ltd3.8%
3Alphabet Inc3.4%
4Amazon.com Inc3%
5Prosus Na2.6%
6Capri Holdings Ltd2.5%
7AngloGold Ashanti Limited2.4%
8Canadian National Railway Co2.3%
9Microsoft Corp2.3%
10Anglo American Plc2.2%

Advantages of the Coronation Global Optimum Growth Fund

  • The fund outperforms the set benchmark from time to time.
  • The fund is suitable for those that want to invest in the USD.
  • There are many markets that the fund invests in, which makes the fund diversified and less risky.

Disadvantages of the Coronation Global Optimum Growth Fund

  • Short-term investments in the fund can provide capital losses to a certain degree.
  • There are no capital guarantees when investing in the fund and the investment is subject to the performance of the fund.

Conclusion

The Coronation Global Optimum Growth fund provides a fund that allows investors to gain interest over the long term. The fund requires an investment in USD and has remarkable growth, which outperforms the US inflation rate and also outperforms its benchmark. If you are looking to invest in a fund that is US quoted and provides above-average returns, the Coronation Global Optimum Growth fund is a fund to invest in. 

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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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