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Big bond fund saw the highest net inflows in 2020

Among SA unit trusts, lower-risk and international products were favoured by investors.
Image: Waldo Swiegers, Bloomberg

In a year of extreme market uncertainty, it is no surprise that lower risk and international products were favoured by investors last year. Excluding money market funds, the major beneficiaries of new inflows over the past 12 months were South African bond, local income, and global equity funds.

According to Morningstar data, four of the top 10 funds by net inflows in 2020 are in the Asisa South Africa interest-bearing short term category. Two more are South Africa multi-asset income funds, with two others being global equity general portfolios.

Bond funds to the fore
The fund that took in the largest net inflows last year was the Nedgroup Investments Core Income fund. It was already the largest bond fund in the country at the end of last year, but saw another R13.5 billion of net inflows over the course of 2020.

This grew the fund to R64.9 billion, making it the fourth largest unit trust domiciled in South Africa overall, and the third largest when money market funds are excluded.

Notably, the fund is a below average performer in its category over one year, three year and five years. It has, nevertheless, out-performed its benchmark – the STeFI Composite Index – over all of these time periods according to its latest fact sheet.

The second highest net inflows in 2020 went to the Absa Core Income fund, managed by James Turp. This fund also sits in the South Africa interest-bearing short term category. It took in R9.1 billion over the year, which nearly doubled its size to R19.5 billion.

In contrast to the Nedgroup fund, the Absa Core Income fund is a top-five performer in the category over both one and three years. (It does not yet have a five year track record.)

Exceptions
The notable exceptions among the top 10 funds by net inflows last year are the Prudential SA Equity fund, which is a South Africa equity general fund, and the Ninety One Opportunity fund, which sits in the Asisa South Africa multi-asset high equity category.

The former, which is managed by the team of Ross Biggs, Johny Lambridis, Chris Wood, Simon Kendall and Aadil Omar, took in an additional R7 billion in net inflows in 2020.

It is now the second largest general equity fund in South Africa, behind the Allan Gray Equity fund. It surpassed the Coronation Top 20 fund during the year.

The fund is, however, a bottom quartile performer over both one year, and three years.

It is one of only 45 funds in the category to have registered a negative return over both time periods.

The Ninety One Opportunity fund, managed by Clyde Rossouw, noticeably went against the trend of significant outflows from the country’s largest multi-asset high equity and low equity funds. It took in net flows of R5.4 billion during the year, and is now the fifth largest unit trust in the country overall.

Excluding money market funds, it is fourth on the list.

For the full top 10 of local unit trusts, excluding money market funds, that took in the largest net inflows last year, scroll through the 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.

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Yip that’s where I was focussed.

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