Tuesday, January 8, 2008

Our yearly model portfolio continues to excel

Since we started creating our yearly model portfolio at the beginning of 2002, our yearly model portfolios have been generating excellent returns for readers who followed and implemented them diligently.

Our yearly model portfolio for 2007 is no exception. Our portfolio generated a return of 50.6%, comfortably outperforming JSE Alsi's 19.2%. The star performers in our portfolio are:

  • Digicore - the share price rose from 421 cents to close at 970 cents. Including dividends, the return is 133%
  • Acc-Ross - the turnaround stock, the share price rose from 32 cents to 80 cents to give a 150% return.
  • Enviroserv - a waste management company, which gave a 95% return last year.

The laggards in our portfolio are:

  • Telkom - with its declining earnings and unsuccessful corporate actions,its share price has ended flat for the year. Its generous dividends boosted its return to 5%.
  • Mvela Resources - its has been a roller coaster ride, with the share price rising to more than R60, only to give up most of the gains to end up the year with a 7% return.
  • PSG - affected by the general negative sentiments towards the financial sector, it has given a return of 2%.

We will soon be releasing our yearly model portfolio for 2008 in the second half of January. For investors who would like to pay a fee in order to receive the information before then, please write to info@daberistic.com.

What are the performances of top managers in 2007?

Readers of this blog know I am a big fan of the following asset managers: Allan Gray, John Biccard of Investec Value Fund, Tim Allsop of the Nedgroup Rainmaker Fund and Anthony Sher (who was until recently the portfolio manager of Stanlib Small Cap Fund).

So how did they fare in 2007? (The 12-month performance listed below is on sell-sell basis)

Allan Gray Equity Fund - 18.83%
Investec Value Fund - 10.21%
Nedgroup Investments Rainmaker Fund - 15.48%
Stanlib Small Cap Fund - 48.58%

The All Share Index Total Return - 19.2%

While Allan Gray, Investec Value Fund and Nedgroup Rainmaker Fund have underperformed the index, I believe it's a short-term phenomenon. Due to their investment approaches, they may underperform from time to time, but they will likely outperform the index over the long term.

Top performing unit trust funds for 2007

With 2007 just behind us, Equinox has announced the top-performing 25 unit trusts for 2007. They are dominated by the mining and commodities funds, smaller companies funds as well as flexible allocation funds.

An analysis of the top-performing unit trusts by various factors follow:

By fund classification:
Mining and Resources: 9 funds
Smaller companies: 4 funds
Flexible asset allocation: 6 funds
Other: 6 funds

By asset management company:
Stanlib - 4 funds
Sanlam / SIM - 4 funds
Various - 17 funds

Top performing unit trust:
Stanlib Small Cap Fund - 48.58%