It isn’t surprising that over the past three years, unit trust investors have dialled down their exposure to SA equities. Over 10 years the SA general equity sector has failed to beat the high equity, or balanced, funds. And that’s not supposed to happen according to the textbooks exalting modern portfolio theory.

Over five years, equities have got the wooden spoon, with a 4.9% annualised return. In fact, the best performers were short-term interest-bearing funds. These used to be called income funds, investing in debt products with an average duration of no more than two years...

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