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Assets of SA collective investment schemes stay above R3trn threshold

Statistics show many investors moved their money into portfolios with high equity exposure.
Assets under management by collective investment schemes fell marginally from R3.14 trillion at the end of December 2021. Image: Shutterstock

The Association for Savings and Investment South Africa (Asisa) confirmed on Tuesday that assets under management by collective investment schemes (CIS) remained above the R3 trillion mark, at R3.09 trillion as of the end of March 2022.

This is despite the stock market instability experienced at the beginning of the year.

Nevertheless, assets under management by such schemes fell marginally from R3.14 trillion at the end of December 2021.

Sunette Mulder, senior policy advisor at Asisa, says the closure of the Absa Money Market Fund in June 2021 distorted CIS flow statistics for the second quarter of last year, as well as for the 12-month period ending in March 2022.

Read: Absa closes money market fund

Absa confirmed the closure of its R80 billion money market unit trust fund on April 7, 2021. Clients were given until July 1, 2021, to move their money into alternative markets.

Mulder noted that without outflows from the Absa fund, the industry’s net inflows for the year would have exceeded R100 billion.

Asisa says a majority of the CIS portfolio categories delivered average returns that outpaced inflation over the five-, 10- and 20-year periods to March 2022.

According to a statement released on Tuesday, the local CIS industry reported net inflows of R28.1 billion for the first three months of 2022, bringing the total net inflow for the year ended March 2022 to R70.7 billion.

The association says R55.4 billion of the R70.7 billion was garnered from South African multi-asset portfolios, the highest achieved by these portfolios since 2016/17.

According to Mulder, the statistics show that many investors moved their money into portfolios with a high equity exposure, expecting to further participate in last year’s market growth.

Multi-asset portfolios 

She noted the rise in popularity of multi-asset portfolios saying, “For several years, local unit trust investors and their financial advisors were investing almost exclusively in South African multi-asset portfolios. However, in recent years the appetite for this sector waned and SA interest-bearing portfolios attracted the bulk of the net inflow.”

“The SA multi-asset high equity portfolios were most popular with investors over this period, attracting almost R24 billion in net inflows. In the 12 months to the end of March last year, these portfolios collectively had net outflows of R10.5 billion,” Asisa adds.

Mulder says 24% of inflows into the CIS industry came directly from investors, intermediaries contributed 33% of new inflows, linked investment services providers generated 27% of sales and institutional investors, which include pension and provident funds, contributed 16%.

South African equity portfolios, according to Mulder, are also becoming popular among investors, attracting net inflows of R11.7 billion.

Asisa says locally-registered foreign portfolios held assets under management of R633 billion, recording net inflows of R13.4 billion for the quarter ended March 2022, which brought total net inflows for the year to R17.9 billion.

At present, there are 609 foreign currency-denominated portfolios on sale in South Africa.

Nondumiso Lehutso is a Moneyweb intern.

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