1nvest Rhodium and Palladium ETFs emerged as the JSE’s top-performing index tracking fund

1nvest insights graph


1nvest is proud to announce that its Rhodium Exchange Traded Fund (ETF) has, for the third consecutive year, emerged as the JSE’s top-performing index tracking fund. The fund returned an astonishing 187.14% in 2020, which is up significantly from the 140.9% annual return delivered to investors in 2019.

Over the last three years, the ETF has delivered an annualised return of 124.96%. The fund, with R1.14 billion assets under management (at time of writing), forms part of 1nvest’s comprehensive offering of ETFs, which includes precious metals, local and foreign indices.

Another 1nvest precious metal ETF offering is the second top-performing index fund for the third year in a row –1nvest’s Palladium ETF – returning 38.03% during the period. This ETF moves into the top-performing spot over the five-year period, delivering a 31.98% return over this time.

Johann Erasmus, Executive Director of 1nvest, says that rhodium’s impressive run can be attributed in large part to stricter vehicle emission regulations being implemented. This has resulted in high demand that is outstripping supply.

He explains that about 1 million ounces of rhodium are only produced annually, with South Africa producing the bulk of this supply. “There was also a slowdown of platinum group metal (PGM) production due to the pandemic. The reduction in PGM supply was further aided by closure of some PGM mines and the shutdown of Anglo-American Platinum’s converter plant.”

Erasmus adds that for a substantial part of 2020, markets saw a flight to safety through commodity ETFs such as the 1nvest Gold ETF as markets continued to take shocks and strain. In the Gold ETF category, the 1nvest Gold ETF is the top performing fund for 2020, returning 29.93% over the period. It has also been the top performing South African gold ETF over the three- and five-year periods, returning 19.99% and 10.59% respectively.

“We have seen a marked increase of use of the 1nvest commodity ETFs by our clients wishing to trade precious metals. Due to the increased liquidity provided by Standard Bank, we saw more than ZAR22 billion of 1nvest commodity ETFs trade on the JSE by end 2020.”

According to Mike Brown, Managing Director of etfSA.co.za, the past year has been one of mixed index returns. “Foreign equity indices have outperformed the local JSE indices over the past year. However, local equity indices have recovered over the past few months.”

He says that the high-tech global sectors have rewarded investors who looked beyond broad market indices. This is evident in the performance of the 1nvest S&P 500 range of funds. The 1nvest S&P 500 Info Tech Index Feeder ETF featured in the top five funds of 2020, returning 49.89% in the year. Meanwhile, the 1nvest S&P 500 Info Tech Index Feeder Unit Trust featured in the top 10 (sixth place) index tracking funds for 2020, returning 48.31%.

It has become much easier nowadays to access offshore markets using index tracking funds. Investors can invest into offshore assets through feeder funds, which track global markets like that of the US. 1nvest’s feeder funds did exceptionally well in 2020, with the 1nvest S&P 500 Index Feeder Fund returning 22.33% during the year. This makes it the second top-performing world index tracking unit trusts for 2020. The 1nvest MSCI World Index Feeder Fund took the third top-performer spot, returning 21.56%, while the 1nvest Global Government Bond Index Feeder Fund came in at fifth position, returning 14.50%.

“The diversity of our product offering at 1nvest is a demonstration of the value that is unlocked for investors. 1nvest offers a wide selection of top-performing, easily accessible index tracking funds that investors and/or their financial advisors can utilise to create or enhance a portfolio.

“Most importantly, our award-winning expertise combined with the backing of the larger Standard Bank Group means that our clients are assured that we place their interests first when providing them with the best-in-class index investment products,” concludes Erasmus.