The Coronation Equity Fund invests in equities in South Africa and internationally. The fund has most of its investments in South Africa, with investments in the JSE listed companies accounting for over 80% of the fund. This fund is suitable for anyone that is comfortable investing in the equity markets in South Africa and internationally.
The fund has been mandated to invest in a wide range of stocks on the JSE, posing no restriction on the sectors to invest in. The fund allows investments in African countries, however, investments in equities across Africa are limited to 5% of the fund as per mandate.
On the other hand, there are also limitations to how much can be invested in international equities. The fund allows for a maximum of 25% investment in international equities. There is no maximum cap on the level of investment that can be made in South African equities.
An investment in equities is one of the most volatile in the short run, especially at a time of recession. To make sure that the investors benefit from the fund, the fund calls for investors that want to invest for the long term. These are individuals that want to invest for a time period of 10 years or more.
Given that the fund has a track record that stretches back nearly three decades, the fund’s performance can be measured reliably to a certain extent. With historic data from April 1, 1996, the fund has shown incredible increases for a 10-year segment since the fund was launched.
The Coronation Equity Fund provides an investment opportunity that can help any investor earn interest over the long term. Before investing in the fund, read the discussion below to get a clearer understanding of the fund. The Coronation Equity Fund is discussed in detail below.
Coronation Equity Fund summary
The Coronation Equity Fund is a unit trust that invests in equities in South Africa and internationally. The fund is managed by Karl Leinberger and Sarah Jane Alexander. As of 2022, the Coronation Equity Fund is valued at R8.39 billion. Each unit sells for R210,53.
An investment in the Coronation Equity Fund has a minimum required amount. A minimum monthly debit order of R500.00 can be made towards investing in the Coronation Equity Fund. Another alternative is to make a minimum contribution of R5,000.00 for a lump sum contribution. Both methods can be combined to make a contribution to the fund.
Coronation Equity Fund is a high earner and since its inception, it has achieved 3475% growth. Looking closer to the achievement, for example, an investment of R100,000.00 into the fund in Jan 1997 would grow to a total of R3.475 million in 2022.
To achieve such a feat, the Coronation Equity Fund strategically invests in a number of stocks that it deems as great investments. The fund has invested in a number of companies that are great performers. The fund has made investments in the following companies:
Coronation Equity Fund’s top 10 investments
| # | Stock/ Company | Allocation percentage |
| 1 | Prosus | 6.89% |
| 2 | Anglo American Plc | 6.65% |
| 3 | FirstRand Ltd | 5.15% |
| 4 | Glencore Plc | 3.66% |
| 5 | Standard Bank Group Ltd | 3.26% |
| 6 | MTN Group Ltd | 2.79% |
| 7 | British American Tobacco PLC | 2.66% |
| 8 | Companies Financiere Richemont SA DR | 2.62% |
| 9 | Rand Merchant Investment Holdings Ltd | 2.50% |
| 10 | Quilter Plc | 2.25% |
How the Coronation Equity Fund works
To invest in the Coronation Equity Fund, an investor will need to choose an investment vehicle to place an investment. An investor can choose between an array of investment vehicles that are offered by Coronation. Furthermore, investment vehicles from other financial institutions can be used but should be made directly with the institution that has the fund as part of its offerings.
The fund invests 97.3% of the investments in equities, which renders the fund Regulation 28 non-compliant. Non-compliance with Regulation 28 of the Pension Funds Act 24 of 1956 means that retirement investments cannot be invested in the fund. These investments include but are not limited to retirement annuities, living annuities, and preservation funds.
When making an investment into the fund, beneficiaries of the fund will have to be nominated. This is done to ensure that the fund’s beneficiaries get compensated should anything happen to the investor. The beneficiaries will be allotted the proceeds from the fund according to each beneficiary’s benefit percentage.
After a successful application, the investor will need to make contributions to the fund. Contributions can be made either by monthly debit order or once-off. The investor can then watch the units they bought grow in value over the years. Switching funds can be done by the investor by switching from one account to another.
The fund comes with costs for managing, administrating, and transacting. The fund charges an annual management fee of 0.75% to a maximum of 2.60%. There are other costs that are associated with investing in the fund. These include the total expense ratio and transaction costs, which vary per year.
Advantages of the Coronation Equity Fund
- The fund provides good returns on investment over a long period.
- There are 2 contribution methods available for investors.
- Investors don’t need to manage the investment in the fund as managers are there to invest on behalf of clients.
- The fund only invests in top stocks on the JSE and in other international equities.
- The product can be purchased remotely.
- There is a proven track record of 26 years showcasing how well the fund performs.
Disadvantages of the Coronation Equity fund
- Investment in the fund is volatile over a short investment period and may not favour speculative investors.
- Capital invested in the fund is not guaranteed.
- The fund is not Regulation 28 compliant, therefore, pension investments cannot be made on the fund
Conclusion
The Coronation Equity Fund offers some of the best returns for equity investments for both local and foreign stocks. The product is suitable for those that want high returns in the long run. Therefore, those that want to invest for the short term can look for other unit trusts in the Coronation unit trust range to get a unit trust that supports such an investment.
