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- SA's collective investment industry grew its net assets 3% in the second quarter of 2023 relative to the first, the Association for Savings and Investment South Africa (ASISA) said on Thursday.
- A strong equity market performance has provided a lift, while reinvestments ensured effective net inflows for the period.
- But there were more sales than new investments, resulting in net outflows of just over R10 billion.
- For more financial news, go to the News24 Business front page.
SA's collective investment schemes grew 3% to a R3.27 trillion in the second quarter of 2023 relative to the first. This was largely a result of a strong equity market performance, and despite under pressure consumers tapping their unit trusts.
This is according to statistics released by the Association for Savings and Investment South Africa (Asisa), which said the industry saw net outflows of R10.4 billion during the quarter.
However, R26.4 billion in reinvestments of dividends and interest did provide effective net inflows, despite signs that many have depleted their emergency savings, and were turning to their unit trusts for relief.
"During the second quarter, the repo rate increased by 0.5% to a 14-year high of 8.25%, which placed an additional burden on consumers servicing debt like home loans and car repayment," Asisa senior policy advisor Sunette Mulder said in a statement.
"And in May this year, another petrol price increase meant that South Africans were paying on average R1.50 a litre more than in the previous year. Given the overall increase in living costs in South Africa, we were not surprised to see investors tapping into their investments.”
At the end of June, 19% of assets under management were held in SA equity portfolios, while SA interest-bearing portfolios held 30% of assets. Half of all assets remain in SA multi-asset portfolios, with the remainder in SA real estate.
Mulder said multi-asset portfolios continued to regain popularity with investors in the second quarter and had been the preferred investment vehicles for local unit trust investors and their financial advisers until 2016, when interest-bearing portfolios - holding assets such as bonds - started attracting the bulk of the net inflows.
READ | ANALYSIS | SA unit trusts - the winners and losers over the past decade
"Given the current market volatility and an uncertain economic outlook, it is unsurprising that investors are opting for multi-asset portfolios designed to deliver a more stable performance than pure equity portfolios by smoothing out market volatility through diversification," she said.
Locally registered foreign portfolios held assets under management of R810 billion at the end of June, from R737 billion at the end of March, having recorded net outflows of R16.5 billion.
