CoreShares offers two multi-asset funds, namely the CoreShares Wealth Accumulation Fund (which falls into the ASISA High Equity category and targets CPI+5%) and the CoreShares Stable Income Fund (which falls into the ASISA low equity category and targets CPI+3%). In this report we look at the events of 2021 and assess both funds’ performance during the fourth quarter of 2021 and 2021 as a whole.

Despite concerns about a new Covid-19 variant and an upward shift in structural inflation, 2021 proved to be a good year for growth assets – most notably equities and property.

The pandemic once again dominated headlines as global case numbers more than tripled through the year to around 300 million. While the emergence of the Omicron variant initially weighed on risk sentiment, optimism soon returned on expectations that Covid-19 would move from a pandemic to a more manageable endemic state.

Meanwhile, it became clear that inflation was stickier than initially thought, and investors began preparing for higher interest rates and the end of the US Federal Reserve’s stimulus programme.

Against this backdrop, we saw a large divergence in equity market returns across the globe.

Developed markets delivered strong returns of 32% in rand terms, while returns in emerging markets were muted as China delivered just 6% for the year. Concerns around cross-border regulations, and a crackdown on Chinese tech giants, dented investor confidence in the world’s second-largest economy.

However, South Africa bucked the emerging-market trend. Domestic equities posted returns of over 30%, despite a poor performance by index-heavyweights Naspers and Prosus. Richemont was a standout performer as luxury goods sales remained buoyant.

Covid-19 case numbers in South Africa tripled to around 3 million by the end of the year. The rand weakened by 8% though 2021, in line with most of the currency’s emerging market peers.

2021 Performance Review: CoreShares Wealth Accumulation and CoreShares Stable Income Funds

The high-equity CoreShares Wealth Accumulation fund had a strong finish to the year, and a solid 2021 overall. Returns were boosted by local and foreign property, and by global and local equities.

The fund, which is suited to investors with long time horizons, delivered full-year returns of 24.73%, comfortably outperforming the peer average of 20.32%.

The more conservative CoreShares Stable Income fund was also buoyed by growth assets, although inflation-linked bonds and nominal bonds generated healthy returns as well.

The fund also outperformed, delivering returns of 15.61%, versus the peer average of 13.53%.

All in all, 2021 was a good year for both funds.

Once again, 2021 showed just how difficult it is to consistently get tactical asset allocation calls right.

CoreShares Wealth Accumulation Q4 Performance Attribution

CoreShares Wealth Accumulation 2021 Full Year Performance Attribution

CoreShares Stable Income Q4 Performance Attribution

CoreShares Stable Income 2021 Full Year Performance Attribution

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