Huge sector performance disparity on JSE

2016-08-16 08:30

The J200:TOP40 put in a major bottom on 21 January 2016, after falling more than 15% from November 2015. It us up 10% since then. But an old rule-of-thumb for selecting a particular ETF after large corrections would have seen you gain a whopping 34% since January 21.

We thought it would be interesting to use our sector comparison tool provided for our PowerStocks Research clients to see how various ETF’s (Exchange Traded Funds) have performed versus the SATRIX-40 since the 21st January trough.

The chart below shows the SATRIX-40 (STX40, black line, top) has out-performed ETF’s representing China, Emerging Markets, Japan, USA, World and Europe. The STX40 has slightly outperformed the DBEMER representing all emerging markets.

So we can gather that the current risk-off trade since the large bottom on 21st January 2016  is favoring the emerging markets (in Rand terms), with South Africa above average at about 8.7% gain since then. Europe and the UK fared the worst, down 14.5% and 12% respectively.

If we dive into the JSE itself, there is an even bigger disparity among the various ETF's representing resources, financials, banking, listed property and so forth. Using an age-old rule-of-thumb we have used for clients for selecting a particular ETF coming out of a 10% or larger correction, would have seen you gain 32% since January 2016 versus the SATRIX-40 which gained 9%.

You can see what this simple rule-of-thumb for large corrections is by reading the balance of the article over here at SharenetVIEWS.

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