This study examines the impact of South Africa’s national soccer, rugby and cricket teams’ performances in international matches on returns on the Johannesburg Stock Exchange (JSE). Match results constitute a mood proxy variable hypothesised to affect stock returns through its influence on investor mood. The unconditional mean return on the JSE All Share index for a 13½ year period from September 1995 to February 2009 was compared to the mean return after wins, draws and losses by the national sport teams. An event study approach was followed and four different statistical tests were conducted in order to test for a relationship. The results of the tests indicate the existence of a moderate win effect, with mean returns after wins being statistically significantly higher for the categories all sports combined, cricket and soccer.
This study focuses on the performance persistence of equity funds in the South African Unit Trust Industry against its appropriate index benchmark (ALSI) over the period 1988 to 2003. A few funds exhibited extraordinary persistence - either in out-performing or under-performing. In general it was found that over the short term (month-to-month and quarter-to-quarter basis) there was a tendency that the current performance of a fund would be repeated, with a greater tendency among the top performing funds to remain a top performer.However, when the persistence of fund performance was measured on a year-to-year basis, less consistency among funds was identified. The decile ranking movement of a fund - upwards, downwards or sideways - became more random in nature. When the forward-looking period was extended to three years, however, the chances that the fund would have stayed in the same decile became very slim.Herein lies the danger of placing your trust with one active manager only; over the long run the performance ranking of managers can assume a random nature if manager skill is not persistent.
Private Equity is rapidly growing as an asset class for investors in South Africa. Local and international literature presents overwhelming evidence to suggest that Private Equity offers superior risk-adjusted returns and portfolio diversification benefits.This study addresses the question of how exactly Private Equity managers are able to achieve superior returns. A sample of 46 individual completed investments representing large buy-outs in South Africa in the period 1992 to 2007 was selected and analysed to quantitatively investigate the relationship between some of the identified sources of return and the realised internal rates of return in the case of each investment. These relationships were not found to be as strong as expected and in many cases were not supportive of the findings in the literature. Only earnings growth and an increase in the earnings multiple had a significant impact on the internal rates of return achieved according to the sample analysed.The authors conclude that investing in Private Equity is too interdisciplinary to distil the sources of return into a few concise elements. Proprietary knowledge, expertise, superior management skills, relationships and experience all seem to play a role in providing Private Equity managers with a competitive edge over their public market participants.
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