Over the past decade and a half balanced funds have become by far the most popular choice for local investors. At the end of 2004 there was less than R10 billion invested in high equity and absolute return funds. Today, funds in the South African multi-asset high equity category have combined assets under management of nearly R480 billion.
The flow of money into balanced funds has also been heavily concentrated into just a few portfolios. According to figures from Morningstar, the five largest unit trusts in this category account for 58.4% of the total. The 10 largest have a market share of 74.3%. This is in a category that currently has 199 funds.
For many investors and financial advisors, the big funds are the ‘safe names’ in the local asset management industry. They have established investment teams and strong track records.
As the table below shows, every one of the 10 largest funds in this category is among the top 20 performers over the past 10 years, and all of them have outperformed the category average. This is out of 49 funds with track records going back that far.
|Large fund performance|
|Fund||Size||10-year annualised||Category rank||Category quartil|