Page 70 - Profile's Unit Trusts & Collective Investments - March 2025

CHAPTER 3

Performance figures for the current and previous years, based on NAV to NAV pricing,
compared, where relevant, to a market index
Details of all charges levied by the manager, including any charge levied on the repurchase
of participatory interests and any change in such charges or how they are calculated
The composition of the assets of the portfolio classified by appropriate category or industry
sector
A statement that copies of the audited annual financial statements of the manager and of
the scheme managed by it are available, free of charge, on request by an investor
For marketing reasons, many CISs report to investors quarterly or half-yearly.
While on the subject of fund reporting, note that certain mandatory disclosures are also
required on any marketing material prepared by a CIS manager. These form part of the investor
protection policies underlying CISCA, in terms of which the CIS manager must fully inform any
prospective investor about the nature of the investment and the associated risks.
Section 100 (4) of CISCA states that “there
must be included in every price list, advertisement, Performance Tables
brochure or similar document published by a
manager or by any of its authorised agents in Trailing Returns
which participatory interests are commended to Performance figures measured
the public, a statement in clear and unambiguous over different periods up to the same end date,
like the ones used in this handbook, are
terms, to the effect that the value of participatory usually called trailing returns. Also sometimes
interests in a portfolio is subject to fluctuation called trailing twelve month (TTM) returns
from time to time relative to the market value of because the periods covered are usually
the assets comprised in the portfolio…” year-multiples. In the newspaper, performance
figures are usually in this category: 1 year up to
Media Reports yesterday, 2 years up to yesterday, and so on.
Newspaper trailing returns therefore answer
In addition to the (at least) annual report from
the portfolio manager, investors and advisers will the question, “If I’d invested exactly three years
ago, what would my investment be worth
also find considerable information available in the now?” In fund fact sheets trailing returns are
media. Various internet services and LISPs make usually up to the last month or quarter end.
available fact sheets (similar to the ones in this Discrete Returns
handbook), and prices and performance statistics
Performance figures calculated over set
are available in many daily and weekly newspapers periods to different end dates are usually
and financial magazines.
called discrete returns. Often these are returns
Tables of performance figures in the press for the last few calendar years, each year
usually follow the classification system used by the shown separately, but discrete returns can
industry (see Chapter 8). also be shown monthly or quarterly. Discrete
The grouping of funds for comparative returns highlight fund performance in a range
purposes is important because of the difficulties of separate non-overlapping periods.
of comparing the performance of different asset Compared to trailing returns, they often reveal
classes. Fixed-interest funds, for example, are the ups and down in a fund’s performance.
subject to very different factors than equity funds. Rolling Returns
Fixed-interest funds are therefore grouped Like discrete returns, rolling returns
together in their own sectors, as are the various typically use set periods, but unlike discrete
equity fund categories. returns the end points overlap. For example,
three-year rolling returns calculated monthly
Another benefit of tables organised in denote performance figures for three-year
categories is the ability to view a group of overlapping cycles – three years to the end of
comparable funds in relation to an industry last month, three years to the end of the
benchmark, such as the JSE All Share index for month before, and so on, as far back as
general equity funds. desired. A scatter plot or an average of rolling
returns often gives a better general
impression of a fund’s performance over time
than discrete or trailing returns.

68 Profile’s Unit Trusts & Collective Investments — Understanding Unit Trusts