This year we have failed to cover Unit Trust Funds and their performance so far. The plan was to take a look at their performance quarterly however due to circumstances beyond our control that was not possible. Better late than never as they say. We will take a look at the performance of Unit Trusts in the first 4 months of the year. As usual, the information here is obtained from the GroWealth April 2022 Unit Trust Report and you can contact the creators of the report to find out more about Unit Trust investing. We will look at our equity-based unit trusts and interest-based Unit Trusts separately as we usually do and compare them to the ZSE and other relevant indicators.
Equity-based Unit Trusts
Fund managers have certainly gotten better at doing their jobs. They surely understand the terrain and are starting to consistently beat market averages. And that’s a good thing for the Unit Trust space but also individual investors. Unit trusts offer simplicity for investors as they leave stock picking up to the professionals and this is easier to do when the professionals are proving their worth. The overall picture looks very good for 23 equity and property-based unit trusts all but one have beaten ZimStat’s CPI inflation and auction exchange rate depreciation for the period under review. Only two, both Property funds, have failed to beat derived parallel market exchange rate depreciation. So you Unit Trusts are keeping your money safe but how good are they at making you money? On average the unit trusts (174.14%) are performing well above the ZSE average of 140.9%. 16 of the 23 unit trusts beat the return of the only purchasable index product on the ZSE, the Old Mutual Top Ten ETF. Those are good odds. Bear in mind we are only comparing returns here and there may be other factors to consider like maturity periods.
Interest-based Unit Trusts
You would not expect much from money market products in Zimbabwe with inflation high and going higher but there are some surprises. Fund managers have also been proving their chops here with 4 of 10 funds (USD funds excluded) beating CPI Inflation. 3 funds managed to beat auction depreciation. Only the Old Mutual Bond Fund has a yield that is higher than the parallel market depreciation of the Zimbabwean dollar. The US dollar unit trusts have handsome yields in US dollar terms.
Platinum and Fidelity continue to dominate top returners in the equity and property section while Old Mutual has a grip on the money market. The emergence of more US Dollar options is encouraging and will hopefully mean even more will pop up in the long term. Unit Trusts are providing a viable option to direct stock market investing which has taken Zimbabwe by storm in recent years.