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Interest-bearing unit trusts with the largest inflows

A look at the Asisa’s SA interest-bearing short-term category over the past 12 months.
Image: Shutterstock

As local investors have moved to the perceived safety of fixed income products over the past few years, interest-bearing unit trusts have been a big beneficiary.

According to the latest Asisa statistics, assets invested in interest-bearing short-term funds have more than doubled from R126.5 billion to R257.6 billion over the past three years.

There have been some particularly large beneficiaries of these inflows. Over the past 12 months, the Nedgroup Investments Core Income fund has taken in net inflows of R11.6 billion. The Absa Core Income fund has more than doubled in size over the same period, taking in R9.1 billion.

Equally interesting is that, despite the substantial net inflows into the category as a whole, 12 of the 43 funds in this category saw net outflows over the past 12 months.

Most notably, the Prudential High Interest fund saw net outflows of R1.8 billion, and the Stanlib Extra Income fund experienced net outflows of R1.4 billion.

Scroll through the slides to see which ten funds took in the highest flows over the past 12 months.

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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The real question is what extra risks do each of these managers take on to generate the “enhanced” yield. Extra leverage, credit risk, tax risk, documentation risk, reputational risk???? It’s easy to enhance return but not without extra risk… but how many of the investors who think they are derisking by switching to debt instruments really understand what this enhancing yield entails

End of comments.

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