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Year's best investment places

By unknown | Nov 07, 2006 | COMMENTS [ 0 ]

Isaac Moledi

Isaac Moledi

What, based on all available major asset classes, has been the best place to invest your money this year up to the end of September? And where was the worst spot?

According to Alphen Asset Management's Adrian Clayton, an offshore basket of 60 percent equities exposed to the MSCI, 30 percent bonds and 10 percent cash would have provided a rand return of 33,3 percent for the year to date as against -0,1 percent in South African bonds.

"Naturally, bond returns tend to be beautifully inversely correlated to the performance of the rand during rand blow-out periods, but ironically the market has not acted in exactly this fashion this time around," says Clayton.

He says over the past quarter bonds have held up remarkably well against a precipitous decline seen in the currency.

The Findi returned 11 percent in the third quarter, but -5,6 percent in quarter two.

Though bonds and Findi companies thrive on a strong rand, Clayton says resources and certain dual-listed rand hedges are enormous beneficiaries of weakness in the rand.

This, too, was illustrated to perfection this year, with the likes of the platinum shares returning 62 percent and general mining 46 percent.

"A further reflection of this situation can be seen in the returns of the all share index, which has delivered a return of 26 percent this year as against the basic materials index of 41 percent, the industrials at 19 percent and the financials at 18 percent."

From a stock perspective, Clayton has identified which companies came out tops in returns for the three quarters to the end of September.

"Topping the list in the year to date is Northam with a rand return of 115percent. Within the top 10, eight are miners, the exceptions being Liberty International at number five and Netcare at four."

The worst performers this year to date were JD Group, down 12 percent, Edcon 11,9percent, African Bank Investment Limited 6,6 percent and Imperial 5 percent.


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