So how did the Satrix Top 40 ETF do?
August was not the brightest month for the Top 40 companies as only 12 companies were in the green, while the rest remained in the dark and experienced a decrease in share price compared to last month.
As at the 31st of August, the Satrix 40 ETF closed at R69.63. That’s a decrease of 5.3% over the past month (R73.53), however that is still a 3.5% increase from the end of 2022 (R67.28).
Let’s look at the performance of the top and bottom performing Satrix Top 40 companies’ shares to understand the decrease over this past month:
Top-Performing Satrix Top 40 ETF Companies
The market has welcomed the promising financial half year results of AB InBev as its share price gained 5.5% this month, despite the continued boycott of Bud Light. Earnings grew 5% and revenues of its global brands increased by 18%. This combined with a promising future outlook ensured a champion month for the champion beer manufacturer.
British American Tobacco (BAT), also had a decent month as their share price increased just under 5%. This was largely due to increased cigarette prices and an ever-growing demand for tobacco alternatives such as vapes. BAT has upped their investment in next-generation vapes and heated tobacco products to support the increased demand in such products. With vape demand being so high, I wouldn’t be surprised if BAT soon becomes BAV.
Another top performer this month was the leading property investment and development group in Central Eastern Europe, NEPI Rockcastle (“NEPI”). NEPI was the top performer this month as its share price increased just under 6%. This increase was due to its recent impressive financial results, where NEPI’s R136 billion portfolio of 60 shopping centres, across 9 European countries, continues to cash in on the relative strength of the region’s economy.
Bottom-Performing Satrix Top 40 ETF Companies
Unfortunately the precious metals and mining sector fell back into their downward trend of 2023 as Kumba Iron Ore (-15%), Sibanye-Stillwater (-15%), AngloGold Ashanti (-18%), Implats (-24%) and Amplats (-25%) were all the worst performers this past month. This was due to decreased half-year profits caused by continuing rail logistic issues and seemingly never-ending load shedding.
Another big loser this month was MTN as the telecommunications service provider’s share price fell 14%. This was mainly due to their ongoing dispute with IHS (South Africa's largest independent tower operator). MTN has raised governance concerns with the tower operator, in which MTN has a 26% stake, which could result in a hostile takeover by MTN.
2023: Spring, around the corner!
August’s performance did not carry the momentum generated in the previous month of July, as like the country as a whole, most companies were left in the dark. But remember, investing in the equity market is a long term practice and while you might have fluctuations from month to month, the fund may move in an upward direction as a whole. The graph below is a good visual representation of the fact that the longer you remain invested, the better your potential returns (shows the STX40 ETF performance over the past 3 years).