The lowdown: On the 31st of January, the Satrix Top 40 ETF closed at R67.97. That’s a 3.8% decrease over the past month (R70.66), and a 7.9% decrease from 31st January 2023 (R73.78)

The analysis: Looking at it month-on-month, January wasn’t a great month for the top 40 companies on the Johannesburg Stock Exchange (JSE). The majority of companies (32 out of 40) were in the red this month – Janu-worrying, for sure.

Are you committed to the rollercoaster ride? 🎢 There are ups and down in equity investing, which is why the minimum recommended investment period in the equity market is 3 years. As you can see in the graph below, the Satrix Top 40 ETF is up 18% over this period. If you want to invest for less time, opt for a lower risk investment, like the cash fund (Allan Gray Money Market). 
Satrix Top 40 ETF performance over the last 3 years

So how did the Satrix Top 40 ETF do?

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 versus bottom performers on the Satrix Top 40 ETF fund in January 2024 

Top-Performing Satrix Top 40 ETF Companies

The biggest winner this past month was Richemont. The Swiss-based global luxury goods company share price increased 10% as Q4 sales numbers impressed the market. Festive season shopping was greater than expected and delighted Richemont shareholders.

Another winner this month was BIDCORP. The foodservice company, who distributes fresh and frozen produce globally, experienced a 6% gain during January. This gain can be attributed to a continued positive outlook following on from their record 2023 financial year performance, where revenue, profits and dividends soared.

British American Tobacco (BAT), won the bronze medal this past month as their share price increased 3%. This slight increase is due to their financial performance being in line with forecasts.

Bottom-Performing Satrix Top 40 ETF Companies

January was a painful month for platinum producers Impala Platinum (Implats) and Anglo American Platinum (Amplats), as their share prices declined 20% and 17% respectively. Decreased profits can be blamed on falling platinum prices and impairments (reduction in the estimated or nominal value of an asset) derailing the 2023 financial performance of the platinum giants. These effects have continued to be felt in 2024.

A further negative factor affecting Amplats (and MTN, who dropped 17% this last month), was the resignation of a board member, who made headlines for having discrepancies on her CV, which resulted in termination of her membership on the Presidential Economic Advisory Council.

Another company with a toxic start to the year was energy and chemical giant Sasol, who was down 11%. Volatile macro-economic factors, including weaker oil prices, unstable demand, and continued inflationary pressure compounded by the underperformance of state-owned enterprises in South Africa all contributed to their poor start of the year.

Another giant slayed this month was BHP (-8%). This was a result of the news that BHP, Vale and their Samarco iron ore joint venture have to pay $9.67 billion (R184 billion) in damages over a deadly dam burst in 2015, in which the mining giants were responsible. The collapse of the Fundão dam caused a giant mudslide that displaced 700 people and killed 19, and is considered to be one of Brazil’s worst environmental disasters.

2024 – Not the start we had hoped for

Despite the underwhelming performance to begin 2024, remember that investing in the equity market is a long-term practice and month-to-month fluctuations can be expected.