Page 318 - Profile's Unit Trusts and Collective Investments 2021 issue 2

Offshore Unit Trusts Performance Figures Statistics

Offshore Unit Trusts Performance Figures
Offshore Unit Trusts Performance Figures
In South African parlance, offshore unit trusts are those which are domiciled in a foreign country and
priced in a foreign currency. These “non-rand-denominated funds” must not be confused with South
African unit trusts which invest in foreign assets – the latter are rand-denominated funds domiciled in
South Africa which make use of institutional foreign investment allowances to invest in shares and
other securities listed on overseas exchanges (such as London, New York and Tokyo). Under the
ASISA classification these are called Global and Regional funds (although Worldwide funds also have
the flexibility to invest most or all of their assets in overseas assets).
In buying into an offshore fund an investor is making a non-SA investment – capital is physically
moving overseas. In order to invest in these funds, therefore, South African residents need approved
cash resources outside of SA or need to make use of the foreign investment allowance.
The funds on the following pages are FSCA approved offshore funds, ie, funds that are registered in
SA for marketing purposes. A South African investor with a foreign investment allowance is not
restricted to FSCA approved funds but these are obviously more accessible to South Africans.
Performance

The tables on the following pages show the performance of overseas unit trusts, ETFs and mutual
funds that are marketed in South Africa. These are funds that are not domiciled in South Africa. They
are priced in foreign currencies like dollars, pounds and euros.
The performance tables on the following pages show the investment returns of the offshore funds in
both rands and US dollars. The rand performance figures facilitate comparison with rand-denominated
funds domiciled in South Africa (especially the Global and Regional funds). “Rand performance” does
mean, of course, that the returns shown include the effects of foreign exchange movements. If the rand
has been weakening, the returns to South Africans (in rands) of an offshore fund will be enhanced (ie,
better than the returns achieved by the fund in its base currency). If the rand has been strengthening,
the returns of the fund will be reduced compared to the fund’s base currency. Note that not all offshore
funds are denominated in US dollars – the US dollar returns for those funds priced in other foreign
currencies (like pounds and euros) are therefore also affected by forex movements between those
currencies and the dollar. See “Foreign, Offshore and Global Funds” in chapter 2 for more information
on the differences between local and offshore funds.
In line with all performance statistics produced by ProfileData, the rates of return for offshore funds
exclude initial charges and/or commissions but include dividends, which are reinvested into the fund.
In summary, the basis of the performance figures for offshore unit trusts on the following pages are as
follows:
Distributions are included (ie, reinvested) where applicable (not all offshore funds pay out
income)
All upfront costs are excluded
Percentage returns for more than a year are annualised to show average annual growth
Returns are annual compound growth rates
Performance is calculated in rands based on the ZAR-base currency exchange rate at each event
date
Performance is calculated in dollars based on the USD-base currency exchange rate (where
applicable) at each event date

316 Profile’s Unit Trusts & Collective Investments — OFFSHORE