Global economic and investor sentiment gained further traction in the fourth quarter of 2009 as global liquidity concerns faded fast. The risk appetite of global investors, as measured by the bond yield spread between emerging market bonds and US bonds, continues to shrink. Evidence of sustained global economic recovery is increasingly visible, especially in increasing demand and the resultant rising commodity prices.

During the quarter industrial metal prices, as measured by the Economist Metals Index, rose by more than 16 percent, the price of platinum advanced by 13.3 percent and the Brent spot oil price rose from US$66 to US$77 per barrel.

The FTSE/JSE Resources Index was again the belle of the investment ball in the fourth quarter and returned 16.7 percent on a total return basis. By 31 December 2009 the FTSE/JSE Resources Index had climbed by a massive 82.9 percent since its low in November 2008, making it the top-performing FTSE/JSE sector over one year with 35.4 percent.

Domestic equity resources and basic industries (excluding gold and precious metal funds) was the best-performing unit trust subcategory, with an average return of 12.8 percent for the quarter. Domestic equity resources and basic industries also topped the charts for the year with a total return of 37.9 percent.

Over three years, domestic fixed interest money market funds had the edge on resources funds, with 10.1 percent per year as opposed to 9.9 percent. Over five years, resources funds (excluding gold and precious metal funds) continue to top the charts, with an average total return of 25.1 percent per year.

Over the past quarter, international equities continued to build on the recovery that commenced in the second quarter of 2009, adding 3.7 percent to global market capitalisation. Emerging markets put in a stellar performance with 8.2 percent in US dollar terms. Although the global equity market as measured by the MSCI World Index is up by a massive 70 percent from the low in March 2009, it is still more than 30 percent below the peak set in October 2007.

The broad South African equity market, as measured by the FTSE/JSE All Share Index, returned 11.5 percent for the quarter with dividends and income reinvested, taking the total return for the year to 32.2 percent. The equity market is up 54.1 percent from the low in March 2009, but still 17 percent below the peak set in May 2008.

The strong showing in the fourth quarter of 2009 was not limited to resources: the FTSE/JSE Growth and Value indices increased investors? wealth by 13.9 percent and nine percent respectively. The financial-related sectors of the market also enjoyed a reasonable fourth quarter with the FTSE/JSE Financial Index returning 6.5 percent and the FTSE/JSE Listed Property Index yielding 4.1 percent with income reinvested.

The superior performance of resources funds was closely followed by the worldwide equity varied specialist and domestic equity large cap subcategories ? with total returns of 12 percent and 10.3 percent respectively ? and domestic equity growth (8.4 percent).

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