MSCI South Africa ETFs have had a difficult time in recent years as the funds haven’t picked up any momentum since the underlying MSCI index’s strongest performance back in 2016.

Looking at the iShares MSCI South Africa UCITS ETF (SRSA), the fund had a rather devastating 2018, producing a loss of 25.02% for the year, according to iShares. SRSA has also faced a loss of 7.68% over the last five years. Since then, SRSA has started picking up speed, rebounding significantly and producing a positive return of 5.56% year-to-date, aided by the 4.73% increase in the last month. But why?

Well multinational internet and media group Naspers accounts for nearly a third (31.99%) of SRSA’s weightings and announced late last month it has developed a new company which it expects to be Europe’s largest listed global consumer internet company. Naspers’ share price spiked by 9.72% in the last month.

Additionally, SRSA’s second and third largest holdings, Sasol and Standard Bank, have also has a positive month in terms of performance, producing returns of 5.36% and 2.52%, respectively. However Sasol and Standard Bank only account for 5.50% and 5.46% of SRSA, a lot smaller than Naspers' weighting.

Source: iShares

Since SRSA’s inception back in January 2010, the ETF has produced returns of 27.38%. SRSA had a promising period from 2016 to the end of 2017 but majority of its gains were wiped out by 2018’s performance. This is a similar story for all the fund’s mini-gains made which get immediately wiped out since 2011. There is nothing to suggest this won’t be a similar case for the ETF’s most recent performance over the last month as well.

 

 

 

ETF

1M Return

YTD Return

1Yr Return

5Yr Return

 

 

iShares MSCI South Africa UCITS ETF (SRSA)

4.73%

5.65%

-9.78%

3.85%

 

 

HSBC MSCI South Africa Capped UCITS ETF (HZAR)

3.99%

4.88%

-9.49%

3.98%

 

 

Lyxor MSCI South Africa UCITS ETF (AFSL)

3.92%

4.62%

-9.73%

2.45%

 

 

 

Source: Bloomberg