Words on wealth: how your investments fared in the third quarter

Investors in local funds, especially those with high exposure to gold mining companies, should be smiling – the performance figures for the third quarter and for the 12 months until September 30 have been exceptional.

According to Corion Capital’s Corion Report for September, which uses data from Morningstar, the resources sector of the JSE was up 50.8% for the quarter and up 99.1% for the 12-month period. This is largely owing to the extraordinary rise in gold and platinum prices. Gold rocketed from about $2,660 at the beginning of October 2024 to about $3 900 at the end of September this year, or about 47% in US dollar terms. Platinum, which had hovered around $950 for months, surged in May, reaching around $1 600 by the end of September, a rise of 68% in dollar terms.

Tempering this performance slightly for South African investors has been the strengthening of the rand against the US dollar in the last six months, although over the 12-month period to the end of September, the exchange rate was flat.

Overall, the JSE, as measured by the FTSE/JSE All Share Total Return Index, has had an excellent year: the index gained 12.9% over the quarter and 28.9% over the 12 months, according to the Corion Report. One sector on the JSE that performed poorly, however, was financials, according to the Corion Report – they are up 0.9% for the third quarter and 5% for the 12 months.

Local bonds are also doing well, as foreign investors appear to be piling in on the back of good yields and a stronger rand. The bond index was up 6.9% over the quarter and delivered 14.5% for the 12 months.

Global equities, dominated by America’s “Magnificent Seven” (Alphabet, Amazon, Apple, Meta, Microsoft, Nvidia, and Tesla), have done relatively well, but returns have been modest compared with their stellar performance in previous years. In rand terms, the MSCI World Index was up 4.2% for the quarter and 17.9% for the 12 months.

Inflation came in lower than expected at 3.3% year-on-year in August, indicating that investors in interest-bearing assets, including those depending on an income from such investments, can be pleased with their after-inflation performance. Bonds, for example, delivered a real (after-inflation) return of 11.2%.

Good news for consumers, especially lower-income earners, is that food prices are moderating. The Pietermaritzburg Economic Justice & Dignity Group reports that its Household Food Basket, which tracks the prices of 44 basic foods from 47 supermarkets and 32 butcheries across the country, decreased by R1.20, from R5 380.62 in August 2025 to R5 379.42 in September 2025, and increased by only R123.74 (2.4%) year-on-year, from R5 255.68 to R5 379.42. 

Collective investment results

According to the Corion Report, here are how the most popular collective investment scheme categories performed over the 12 months to the end of September:

• SA Equity General: Average 19.1%; best 42.1%; worst 2.0%
• SA Equity SA General (100% SA): Average 22.0%; best 32.9%; worst 0.5%
• SA Multi Asset High Equity: Average 15.0%; best 24.6%; worst –2.0%
• SA Multi Asset Low Equity: Average 12.5%; best 20.8%; worst 6.4%
• Global Equity General (in rands): Average 14.7%; best 47.6%; worst –11.2%

A view of the economy

In September, the SA Reserve Bank (SARB) decided to keep interest rates at existing levels (the repo rate remained at 7%), with projections of a gradual easing later this year if inflation continued to settle around the lower end of its 3-6% target range. The SARB also revised its economic growth expectations from 0.9% to 1.2% for the year, saying the economy remained resilient despite challenges posed by the US administration’s tariff regime.

At the time, FNB CEO Harry Kellan warned that the economy remained in poor shape. “Keeping rates steady provides stability at a time when global and domestic conditions remain uncertain. With this, we urge businesses and consumers to look beyond some of these uncertainties around tariffs, for businesses in particular, to diversify into new markets as trade routes change. While we have seen a notable improvement in consumer confidence, business confidence has not followed the same trend. Both remain in negative territory, suggesting that the economy still faces a low-growth environment,” Kellan said.

However, FNB Chief Economist Mamello Matikinca-Ngwenya noted positive signs that both consumer and business optimism could improve. “These include recent stability and strengthening of the rand/dollar exchange rate, inflation remaining at modest levels and a sharp recovery in gold, platinum, and other resource prices,” she said.

A further indication of improving sentiment can be seen in house prices. “We noted in our FNB Residential Property Barometer that house prices are now rising slightly higher than the inflation rate. This trend should lead to a much-needed acceleration in building activity,” Matikinca-Ngwenya said.

Meanwhile, on the US economy, Deloitte’s economist Ira Kallish reports that, to the extent that there is strength in the economy and in its investment markets, it is almost entirely due to the “big bet” on artificial intelligence (AI). “[Without] the performance of AI-related equities, US equity prices would have underperformed European equity prices. In fact, it has been estimated that AI-related companies were responsible for 80% of the recent gains in the S&P 500 index of US equities,” he says.

* Hesse is the former editor of Personal Finance.

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