An adviser’s deep dive into asset allocation and management
The assets under management (AUM) reported by South Africa’s largest asset managers grew by 13% in the year ending 30 June 2025, with Ninety One topping the total AUM charts with over R909 billion. The how and how much of 94 of the country’s asset managers is on display following the publication of the Alexforbes Manager Watch ™ Annual Survey 2025.
Fickle financial markets
Introducing the latest survey findings, Janina Slawski, Executive: Investment Consulting at Alexforbes, lamented the fickle nature of financial markets. “The domestic outlook changed dramatically in the last quarter of 2025,” she said. “Prior to that, South Africa had entered a low inflation targeting environment. We were upgraded. We came off the FATF grey list. We had fiscal discipline. So, basically, everything looked incredibly rosy,” she said. “And then, on 28 February 2026, US President Donald Trump changed everything.”
In short, the global investment outlook has inverted from mostly positive around October 2025 to deeply negative entering the second quarter of 2026. Against this uncertain backdrop, the theme for the latest Manager Watch survey is The next 30 years: Strategy for a changing world. The 340-page survey report goes beyond a statistical representation of the domestic asset management realm to explore topics such as allocator decision-making and investment-business resilience, including a CEO conversation with Dawie de Villiers and Hendrik du Toit.
The top five asset managers all tip the scales north of R630 billion in total AUM, with the caveat that they are ranked on assets managed for local clients only. So, for example, the mandates that the likes of Ninety One manage for international clients are excluded. STANLIB occupied second place on 30 June 2025 with R804 billion followed by Coronation, R668 billion, Sanlam Investment Managers, R646 billion and Allan Gray at R637 billion. Alexander Forbes Investments is in sixth place and the leading multi-manager with R467 billion total AUM.
94 managers; 875 strategies
“We have always tried to use this survey as a barometer for what is actually happening in the industry,” Slawski said. Asset managers, meanwhile, view the survey as an opportunity to showcase their capabilities to the world. This explains why in its latest iteration, the survey digests insights from 94 asset managers, who in turn shared details on a combined 875 strategies. “There is a lot of pressure from the regulator and National Treasury for the asset management industry to transform,” Slawski said, introducing the strategy style slide.
Alexforbes explained the dramatic increase in BEE strategies, rising to 193 in the 2025 year, as a response to investor demand. “Several of our clients want to allocate at least minimum levels to majority black-owned managers,” Slawski said, describing this as a significant client-demand trend. Another notable multi-year trend is the growth of multi-managers relative to single managers. In 2019, multi-managers managed 15 cents for every rand in the single manager realm; six years later, their share has risen to 30 cents.
Investors who fret over market concentration in local and offshore equity market indices will not be surprised to learn that this is an issue in the asset management world too. Manager Watch 2025 revealed a gradual decline in the share of assets held by the top 10 managers; but they still account for 62% of the combined assets of the 78 managers included in the rankings. The top 20 account for just over 82% of the total. On the plus side, there are signs of growth coming from the remaining managers.
Large managers still attract the bulk of capital, but clients are considering emerging black-owned managers and smaller managers that are able to navigate the small- and mid-cap segments of the JSE more nimbly. According to Slawski, there is amazing commitment to transformation across the manager base. The top 20 have all attained BEE Level I, as have almost 60% of the rest. “Getting to level one requires pulling all of the levers including ownership, board representation, senior management, procurement and ESG allocations,” she said.
Answering the ESG call
There was some brief discussion on the challenges facing both asset managers and the survey team under the broad environmental, social and governance (ESG) measurement and reporting requirement.
Alexforbes noted that many of the larger managers were signatories to both CRISA, the Code for Responsible Investing in South Africa, and the United Nations-supported Principles for Responsible Investment (PRI). “You would expect any manager in South Africa to be able to subscribe to the CRISA principles,” Slawski said. However, the data, energy and resources needed to complete the annual PRI surveys are a real obstacle for smaller brands.
The financial advisers and planners among FAnews’ readership will be more interested in the asset allocation and investment return findings contained in the latest survey. Investment returns for the 12 months to 31 December 2025 were heavily influenced by “dramatic positive returns from local equities” on the one hand, and constraints to offshore portfolios due to the stronger rand.
The South African Best Investment View (BIV) reflected a large allocation to local equities, with returns “significantly driven by the fact that local equities outperformed.” At the end of December 2025, SA BIV portfolios were invested in SA equities (70.73%); SA bonds (20.07%); SA listed property (4.94%); SA cash (2.79%) and SA Other.
Rebalancing for a strong rand
The global BIV showed a slight increase in local equity exposure in 2025 compared to 2024, and a slight trimming of offshore allocations, driven by the outperformance of local versus offshore equities. Under this asset allocation view, SA equities grew from 39.08% to 40.72% while global assets declined from 35.18% to 33.5%. The balance of the global BIV consists of SA Bonds (16.67%); SA listed property (3.67%); SA cash (3.92%) and SA other. “This is a good view of what has happened in the markets, and how asset managers have positioned given that very strong performance of local versus offshore,” Slawski said.
As has become traditional, the presentation slides included some box-and-whisker plots to illustrate the returns from various asset classes and strategies. This type of graphic allows the range of investment returns and the median return for a strategy in a single plot. For example, SA equity returned between 50% and 10% over one year, with a 40% median.
Slawski commented on the huge divergence in SA equity returns being linked to fewer listed opportunities and significant differences between sectors and companies within sectors. “So, this is very much an environment where asset managers need stock picking skills to be able to choose the best performing equity counters; because the ones that underperformed were dramatically lower in terms of returns over 2025,” she said.
Dramatic return dispersions
The same dramatic dispersion was exhibited across the SA BIV one-year returns. The dispersion narrows over three, five and 10 years, though the median 10-year return of just 10% was described as disappointing. Turning to the Global BIV, Slawski said the dramatic improvement in the one, three and five year numbers did not compensate for “quite pedestrian” 10-year returns. She conceded that it has been difficult to tell retirement fund members in accumulation portfolios that the 10-year returns have been this poor.
The volatility exhibited by global financial markets over the first quarter of 2026 hints at why the investment manager’s actuarial team face such a challenge in projecting future returns. “The projections they were doing 10 years ago could never envisage that returns over 10 years would be so challenged,” Slawski concluded. Sadly, the normalisation seen in domestic equities in 2025 has already been undone by events unfolding in the Middle East today. Oil price shocks and inflation will re-set return expectations over one, three and even five years.
Writer’s thoughts:
The latest Alexforbes Manager Watch shows how geopolitical shocks can unsettle return expectations and complicate advice. How can financial advisers keep clients on track to achieve their long-term savings goals despite the volatility? Please comment below, interact with us on X at @fanews_online or email us your thoughts [email protected].
