Global investors cheered South Africa's success in hosting the Fifa World Cup as the FTSE/JSE All Share index substantially outgained the other markets by ending the third quarter 24.9% higher in US dollars, dividends and income re-invested.

Financials and industrials were the darlings, returning 30.6% and 26.9%, respectively.

Much of the returns in US dollars can be attributed to the rand strengthening by 10.2% against the dollar.

While local investors on the South African bourse had slightly less to cheer about than their US counterparts, the return on the FTSE/JSE All Share index of 13.3% in rand terms more than wiped out the previous quarter's loss of -8.2%. South Africa is also a star performer on a one-year basis, returning 30.8% in US dollar terms compared to a paltry 4.6% for the MSCI World index and 17.7% for the MSCI Emerging Market Free index. In rand terms, the FTSE/JSE All Share index yielded a total return of 21.1% for the year.

Despite rising commodity prices, the FTSE/JSE Resources Index lost out significantly due to the rand's strength. In rand terms, the Resources index returned 7.1% for the quarter while the FTSE/JSE SA Industrial index and the Financial index returned 18.5% and 15.2% respectively. On a one-year basis, the SA Industrial index and the Financial index also beat the 12.5% of Resources hands down with 28.2% and 24.3% respectively.

The positive sentiment also flowed over to the South African bond market. The Besa All Bond index returned 19.1% in dollar terms - more than double the JP Morgan Global Government Bond index's 8.0%. In local currency terms, the return on the Besa All Bond index was 8% over the quarter and 15.3% over the past year, income re-invested.

If it is assumed that without the World Cup the FTSE/JSE All Share index would have mirrored the 17.2% return on the MSCI Emerging Market Free index in dollar terms, the excess return as a result of the World Cup would be 7.7%.

The collective investment schemes subcategories that performed the best during the last quarter were the Domestic - Equity - Industrial and Domestic - Equity - Large Cap sectors with 16% and 12.9% respectively.

The worst subcategory for this period was the Foreign - Fixed Interest - Varied Specialist category with -4.3%.

The best four domestic funds over the last quarter were all industrial funds. The best of these were the Old Mutual Industrial Fund and the Stanlib Industrial Fund with 18.4% and 16.5% respectively. The worst fund over this period was the Sanlam International Equity Fund of Funds with -25%.

My advice to clients is to maintain equity exposure in a balanced portfolio at a level that feels comfortable for their specific risk appetite. However, investors with a long-term time horizon (more than 10 years) and who can stomach volatility should continue to favour equity funds that have more than 75% exposure to equities.