New unit trust leader board has a strong resources bias.

There has been a steady re-ranking of the leading equity funds over the last few weeks. Funds that were lagging their peers have suddenly leapfrogged with competing funds. Liz Still looked at what the new leaders have common

The JSE is reaching new all time highs, the rand is valued at R6.76 to the US Dollar and the the oil price is down. The market is being led by gains in resources companies such as Anglo American Plc (R212.20) and Billiton BHP (R99.05) as well as Anglo Platinum (R472.91) and Impala Platinum (R910.00) due to steadily increasing platinum prices; at the moment the platinum price is trading at an all time high of R975 a troy ounce and is expected to move higher. Furthermore, prices of gold shares have been increasing steadily since their mid-year lows

According to many asset manager reports, October was the most volatile month on the JSE for a long time. After an initial fall of almost 8%, the All Share Index recovered by almost 6%. South African shares recovered in line with global equity markets and were also boosted by strong profit numbers from local companies that reported.

With the JSE making all time highs at the end of September, a period of consolidation on the market was overdue. As Equinox chairman Heiko van Wyngaarden noted in his market view, the speed of the recovery was astonishing and momentum remains strong. This shake out also seemed to signal the end of the long retail bull market and the increasing out-perfomance of commodity companies such as Sasol, mining groups Billiton and Anglo, as well as the platinum companies.

November has seen the market break the 17 000 level for the first time ever, making the October correction look like a merely a rough patch in the ever increasing price levels. However, at high market levels, many fund managers have expressed the view that they are struggling to find good value shares with good prospects. Some, like Neil Brown of Old Mutual Asset Managers (OMAM) have responded to this dilemma by investing more heavily in the more liquid Top 40 companies.

It is interesting to note that while the one month and three month top performers are dominated by funds mandated to invest in commodities and resources, the most recent dominance of the property funds is still reflected in the one year out performers.

Most of the out performing funds over one year have high weightings of Sasol, Impala Platinum Holdings, Anglo American plc and BHP Billiton, while many have smaller holdings of Gold Fields and Harmony.

In the two year leader board, there are no resources companies or property-based companies. The funds represented on the list are those that were best positioned to benefit from the retail boom.

Top performers across all unit trust funds over one month, as at 15/11/05

 Top performers across all unit trust funds over three months, as at 15/11/05

Top performers across all unit trust funds over one year, as at 15/11/05

Top performers across all unit trust funds over two years, as at 15/11/05

Investors should note that we are not recommending that they should invest in the funds with shorter term out performance, the objective of this article is to illustrate the effect of the changing dominance of different sectors on the JSE.