According to figures from Morningstar, there were net outflows of R45.8 billion from South African domiciled unit trusts in the third quarter of 2021. That, however, included R64.4 billion of withdrawals from the Absa Money Market fund, which is in the process of being wound down.
Excluding that portfolio, local funds saw net inflows of R18.6 billion. Notably, these flows were more broadly distributed than has been the case over the past few years, and funds with high exposure to local equities returned to favour.
Overall, Morningstar figures show that funds in the Asisa South Africa equity general category received new inflows of R3.3 billion over the quarter. Funds in the Asisa South Africa multi-asset high equity category took in net inflows of R4.7 billion.
These were both substantially more than the R694 million of net inflows into the Asisa South Africa interest-bearing short-term category. The Asisa South Africa multi-asset income category was, however, still slightly more popular with investors, taking in net inflows of R4.9 billion for the quarter.
These figures suggest a significant shift in investor sentiment.
Excluding money market funds, three of the 10 funds with the highest net inflows over the period were South African general equity portfolios. Interestingly, two of them were index funds.
Only two of the top 10 were multi-asset income funds, and another two were short-term bond funds.
It is also significant that the fund that tops the list is a multi-asset high equity portfolio – the Ninety One Managed fund, managed by Citywire + rated Gail Daniel.
These shifts have clearly followed the changing fortunes of local asset classes. The top-performing South African short-term bond fund returned 9.3% for the 12 months to the end of September. Only three of the 165 South African equity funds with one-year track records under-performed that, according to Morningstar’s figures. A significant majority of local equity funds – 84.6% of the category – returned at least double that.
To see the full list of the top 10 funds with the highest inflows over the third quarter of 2021, scroll through the slides.
Patrick Cairns is South Africa Editor at Citywire, which provides insights and information for professional investors globally.
This article was first published on Citywire South Africa here, and republished with permission.