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FEDSURE INDEX FUNDThis fund has 1 581 unitholders and assets under management of R115-million. Launched in February 1995, it is managed by Gerard de Nysschen for Fedsure Unit Trusts
OBJECTIVE: To track the JSE all-share index as closely as possible.
TARGET MARKET: Investors wishing to participate in a portfolio that accurately mirrors the longer-term performance of the JSE.
CHARGES (incl VAT): Compulsory: 0.75%. Initial: 5.46% (on a sliding scale). Annual service fee: 0.57%.
MINIMUM INVESTMENT: Lump sum: R200; monthly R50.
PAST PERFORMANCE (per Micropal): SINCE LAUNCH Fund: 27.1% Inflation: 22.9% JSE all-share index: 28.6% Sector average: 24.1% Correlation coefficient: 0.99 (one represents perfect correlation) Performance is calculated on a buy-to-sell basis with income reinvested.
PAST TWO INCOME DISTRIBUTIONS: June 1997: 1.97c ( 30% interest; 70% dividends). December 1997: 1.72c (27% interest; 73% dividends).
TOP 10 HOLDINGS: Anglo; SAB; De Beers; Liberty; Sasol; Richemont; Billiton; Stanbic; Nedcor; FNB.
TOLL-FREE: 0800 111 144
ABOUT THE FUND MANAGER
AGE: 44
QUALIFICATIONS: BCom (Hons)
EXPERIENCE: Has been managing the fund since July 1996 and is an experienced economist and fund manager.
INVESTMENT ATTITUDE: The aim is to mirror the performance of the JSE all-share index. Achieving this in a market as illiquid as ours requires careful selection of core stocks and an appropriate selection of smaller stocks which together emulate the overall movement of the market. The Wilshire system is used to guide us in our decisions.
VIEW ON PAST PERFORMANCE: The fund has managed to track the performance of the JSE all-share index extremely well, achieving a 99.8% correlation since inception. Tracking the index with this degree of accuracy is complicated by the legal requirement that all SA unit trust funds must hold at least 5% in cash. This means we have to compensate for the "non-equity" holding.
THE FUTURE: It appears that this year value stocks will perform well. These shares, of course, constitute a large part of the JSE all-share index. In addition, we are expecting two further interest rate cuts which bodes well for the equity market and supports our view that equities will perform much better this year compared with last year. With the fund's excellent tracking ability, full advantage of the share market's expected performance will flow through to investors in the fund. Experience worldwide has shown that an index fund will, over the longer term, tend to outperform the majority of actively managed funds.
INDEPENDENT ASSESSMENT
This is a standard index fund in that it mirrors the JSE all-share index. If the index goes up, the fund goes up - if the index goes down, so does the fund. There might be a small variance, however, depending on how much cash the fund is holding, because the index does not have a cash component.
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