The Association for Savings and Investment South Africa (ASISA) has confirmed that assets under the management of the Joint Investment Project (CIS) are above the R3 trillion mark, up from R3.09 trillion at the end of March 2022, compared to R3.14 trillion at the end of December 2021. This is despite feeling the volatility of the stock market at the beginning of the year.
Sunette Mulder, Asisa’s senior policy adviser, said the closure of the Absa Money Market Fund in June 2021 distorted CIS flow figures for the 12-month period ending March 2022, as well as the second quarter of last year.
Read: Absa Money Market Closes Funds
Absa has confirmed the closure of its R80 billion Money Market Unit Trust Fund on April 7, 2021. Clients were given until July 1, 2021 to transfer their money to the alternative market.
Mulder confirms that if there were no outflows from ABSA funds, the industry’s net inflows for the year would have exceeded R100 billion.
Assisa said most CIS portfolio divisions have provided average returns that have surpassed inflation in the five-, 10- and 20-year terms from March 2022.
According to a statement released on Tuesday, the local CIS industry reported R28.1 billion net inflows in the first three months of 2022, bringing the total net inflows to R70.7 billion for the year ending March 2022.
The association says R55.4 billion out of R70.7 billion has been collected from South Africa’s multi-asset portfolios, the highest ever achieved by these portfolios since 2016/17.
According to Mulder, the figures show that many investors have shifted their money to the portfolio with a higher equity exposure, expecting more participation in last year’s market growth.
Noting the growing popularity of the Maltese multi-asset portfolio, he said, “For several years, local unit trust investors and their financial advisers have been investing almost exclusively in the South African multi-asset portfolio. However, the appetite for the sector has waned in recent years and SA interest bearing portfolios have attracted net inflows. ”
“SA multi-asset high equity portfolios were the most popular among investors during this period, attracting around R24 billion net flow. In the 12 months since the end of March last year, these portfolios had a combined net outflow of R10.5 billion, ”the association added.
Mulder said 24% of the inflows into the CIS industry came directly from investors, with intermediaries contributing 33% to new inflows, integrated investment service providers (LISPS) 27% sales and institutional investors, including pension and provident funds, contributing 16%.
According to Mulder, South Africa’s equity portfolios are also gaining popularity among investors, attracting R11.7 billion net flows.
The association said that locally registered foreign portfolios held assets under R633 billion, recording R13.4 billion net inflows in the last quarter of March 2022, bringing the total net inflow for the year to R17.9 billion.
Currently, there are 609 forex-guided portfolios for sale in South Africa.
Nandumiso Lehutso is a moneyweb intern.