There are numerous investment funds out there and sometimes it becomes a little difficult to determine which is the best suited for you.
It is important to note that all funds have different risks and returns associated with them. The general rule is the higher the potential return, the higher the risk of loss. Although some funds are less risky than others, all funds have some level of risk – this is a true for all investments.
Here is a look at some of the top performing South African funds of 2014.
South African General Equity Funds
Equity funds are funds that invest in shares and represent the largest category of investment funds. Generally, the investment objective is to secure long-term capital growth with a small amount of income. There are many different types of equity funds, but the following two funds are the leaders in this category – both bringing high returns, but along with it, high levels of risk.
- Sasfin MET Equity Fund A – At least 80% of the portfolio was invested in listed equities. This fund seeks long-term capital growth, with higher levels of volatility. It is recommended that there is an investment horizon of 10 years on this fund.
- Momentum Best Blend Specialist Equity Fund A – This investment is a high-risk portfolio. It is recommended that an investor have an investment horizon of at least 5 years.
South African Interest Bearing Funds
These funds attempt to provide investors with income and capital growth over the medium to long term, at levels of capital volatility associated with fixed-interest type investments. They generally have a lower level of risk than other funds and tend to be a mixture of bonds, fixed deposits and non-equity securities.
- Absa Multi-Managed Bond Fund A – This fund provides attractive income yields together with moderate levels of capital growth over time. It has low to medium risk and has an investment horizon of 3 years.
- Community Gilt Fund A – This fund has had constant levels of return over the past few years and has performed extremely well. It invests largely in long-dated fixed rate bonds and has an investment horizon of 3 to 5 years with a medium amount of risk associated with it.
South African Multi-Asset Flexible Funds
This is the smallest segment of South African investment funds, and is not highly regulated as they allow fund managers to have free reign when it comes to asset allocation and investment. This is an incredibly broad category of investments, which means that different funds could have very different mandates.
- ClucasGray Future Titans Prescient Fund A1 – The fund’s mandate is to invest in companies outside the Top40 index and utilize its 20% offshore investment capacity. This fund has a long-term investment horizon of 5 or more years, and has medium to high risk associated with it.
- Centaur MET Flexible Fund A – this is a specialist portfolio. Its objective is high capital growth and a reasonable level of income for investors. This fund has a risk profile of medium to high and would be best for an investor with an investment horizon of 3 to 5 years.
South African General Real Estate
These funds are usually less risky and aim to bring lower yet more stable returns and growth to investors by investing in SA property market, sector listed shares and unit trusts in property.
- Oasis Property Equity Fund D – This fund invests in high quality and property related listed companies, and is diversified through the holding of different property types. It has a medium risk profile and is suitable for an investment horizon of 3 years.
- Absa Property Equity Fund A – This fund aims to achieve medium to long-term capital and income growth and has an investment horizon of 3 or more years.
It is important to note that there are many other investment funds out there and performance of each fund varies year to year, however whenever you are looking to invest it is important to remember the golden rule of higher potential return often means higher levels of risk. This of course can all be explained to you by your Financial Advisor, so if you need help on this don’t hesitate to contact us today!