Looking for stellar performance AND longevity? Look no further than Sygnia Itrix MSCI USA. Over the past five years, it has been one of the five best-performing ETFs in the country, and over the past 10 years it tops the list, delivering a total return of 19.96% per annum to 30 November 2019.
Looking for stellar performance AND longevity? Look no further than Sygnia Itrix MSCI USA. Over the past five years, it has been one of the five best-performing ETFs in the country, and over the past 10 years it tops the list, delivering a total return of 19.96% per annum to 30 November 2019.
The past few years have not been easy for South African investors. For the five years to the end of November 2019, the JSE grew at only a little above inflation.
In the US, however, the stock market has been far stronger. The MSCI USA Index, which is made up of the 624 largest companies listed on the NYSE, has grown at around 16.2% per year in rand terms since 2014. Investors in the Sygnia Itrix MSCI USA ETF, which tracks this index, have benefited from this performance.
“It has been the top-performing index-tracker fund in South Africa over ten years, and the top-performing fund in the regional general equity category, which includes actively managed funds,” says Steven Empedocles, a fund manager* at Sygnia Itrix.
A large part of this growth has been driven by technology companies in the index such as Apple, Amazon, Facebook and Netflix, but investors have also benefited from the presence of major global brands in the index such as Avis, Johnson & Johnson and Coca-Cola.
“As a passive fund, its performance comes from the index it tracks,” says Empedocles. “We know that past performance is no guarantee of future returns, but over the past 10 years this would have been a great part of a diversified portfolio.”
The performance of this ETF highlights the value of passive, low-cost investments. This fund gives broad exposure to over 600 of some of the world’s top companies at a total fee of 0.86%.
“Investing in shares does come with some risks, but by investing in an index that is spread across so many different companies operating in a range of sectors, that risk is managed,” says Empedocles. “This makes a low-cost ETF like this suitable for young investors looking for offshore exposure. It’s also useful for more sophisticated investors who want to invest specifically in the US market. Because the index it is tracking is measured in US dollars, it also provides protection against the depreciation of the rand.”
As it is a specialist fund, the Sygnia Itrix MSCI USA ETF should form part of a diversified portfolio to ensure that investors are not over-exposed to a single market.
Investors can easily access this fund and other Sygnia Itrix ETFs through the Sygnia Alchemy platform, which charges an annual administration fee of only 0.2% for investments below R2 million. At over R2 million, the platform charge is just 0.1%. By investing through the Sygnia Alchemy platform, investors will also have some of the ETF’s management fee reimbursed to them.
(*) – Under supervision
Disclaimer
Sygnia Itrix does not provide any guarantee with respect to the capital or return of the portfolio. Collective Investment Schemes (CIS) are generally medium to long-term investments. The value of participatory interests may go down as well as up and past performance is not necessarily an indicator of future performance. CIS are traded at ruling prices and can engage in borrowing and scrip lending. ETFs trade on stock exchanges and may therefore incur additional costs associated with listed securities. Unlike a unit trust, which can be bought or sold only at the end of the trading day, an ETF can be traded intraday, during exchange trading hours. ETFs may invest in foreign securities, which may be exposed to macroeconomic, settlement, political, tax, illiquidity and foreign exchange risks. Additional information on the Index including its performance and tracking error can be viewed on the relevant Fund Fact Sheets on www.sygnia.co.za. A schedule of fees and charges may be requested via admin@sfs.sygnia.co.za or 0860 794 642 (0860 SYGNIA).