Local investors appear to be losing some of their affinity for the country’s largest multi-asset unit trusts.
According to Morningstar data, eight of the 10 local funds with the highest net outflows last year are among South Africa’s 25 largest unit trusts overall. Four of them are in the top 10 by size.
All 10 of the funds that experienced the most substantial net outflows last year are multi-asset portfolios. Five are high equity funds, three are low equity funds, and there is one each from the multi-asset flexible and multi-asset income categories.
The biggest outflows were from the Allan Gray Balanced Fund, managed by Jacques Plaut, Duncan Artus and Ruan Stander, which saw net withdrawals of R13.3 billion last year.
To put the scale of these outflows in context, R13.3 billion is more than 97% of South Africa’s unit trusts currently have in assets under management (AUM).
The fund is, nevertheless, still comfortably the largest unit trust in the country. These net outflows represented 8.4% of its AUM at the start of 2020.
The fund with the second-highest net outflows last year is also the second-largest non-money market portfolio in the country. The Coronation Balanced Plus Fund, managed by Karl Leinberger, Adrian Zetler and Sarah-Jane Alexander, experienced net outflows of R7.7 billion in 2020.
This is despite the fund recording top quartile performance in its category over five years, second quartile returns over three years, and top quartile performance over one year.
Bucking the trend
Possibly the most surprising name on the list of funds with the highest outflows in 2020 is the Coronation Strategic Income Fund. The portfolio, managed by Nishan Maharaj and Mauro Longano, sits in the Asisa (Association for Savings and Investment SA) South Africa multi-asset income category.
This category has, in aggregate, seen substantial investor interest over the past few years, and that continued in 2020. This particular fund, however, saw net outflows of R3.3 billion last year.
The Coronation Strategic Income Fund remains easily the largest fund in this category and one of the 10 largest unit trusts in the country, at R44.5 billion. However, its latest fact sheet shows that it had underperformed its benchmark over the past year and three years to the end of November.
It is also a bottom quartile performer in the category over those two time periods. It is, however, in the second quartile over five years.
For the full list of the top 10 South African unit trusts, excluding money market funds, that saw the largest net outflows last year, please scroll through the following slides.
Patrick Cairns is South Africa Editor at Citywire, which provides insight and information for professional investors globally.
This article was first published on Citywire South Africa here, and republished with permission.