Hot off the press
What with assets under management climbing to R305,946m, over the R300bn mark for the first time, and inflows reached record levels of R42.6bn, up from the 2003 record of R38.9bn.
This is the first time in history that total assets have moved over the R300bn mark.
“It is unlikely that I will be able to talk performance figures like this again in a very long time,” says newly appointed CEO of the ACI. “This last quarter wasn’t as good as the previous quarter.”
So where is the money going?
On the local front the equity funds have dropped to 31% from 52% since 1998, in terms of the asset classes and funds that service that area. The asset allocation sector has climbed, while money market funds have doubled over the last six years.
Fixed interest funds have climbed over the last six years to 34%. “Investors have become a lot more cautious in the last six years, and money markets as still getting most of the flows,” says Turpin.
So where is the money coming from?
The retail sector has grown since 2001, from R19070m to R65699m. There has been R267,444bn of inflows in the last quarter, which is bigger than the industry was several years ago.
The majority of funds are still in the asset allocation area, with the number of retail accounts increasing nicely.
On the performance level, Turpin says that most unit trust holders didn’t really benefit from the performance figures.
“People unfortunately were a little too conservative. Most investors weren’t well positioned, especially in the equities arena.
There were great performances in almost every sector. Investors need to understand that this may not continue into 2005. “Don’t pile in,” warns Turpin. “It may be too late.”
South Africa has been a great place to invest over the last year, and those that were there have benefited. Some of the institutional investors have rebalanced their funds and exposures in the last quarter, to bring them back to their respective benchmark.
Looking forward, Turpin says that while they (ACI) don’t predict the future, the general consensus seems to be that the value in equities may not be there this year, so don’t expect the outstanding returns. Stock picking becomes even more critical.
Turpin says that she sees some potential in the Industrials arena.
Investors have to be realistic, and allow the fund manager to do their job. Turpin suggested that investors should perhaps use the rand’s strength to diversify their portfolios.
Many investors are still underweight the offshore sector, many burnt in 1998, and too scared to go back.
The growth this year in number of funds will probably be driven by FAIS as fund managers build portfolios that are supported by underlying funds – so the fund of funds sector will see some growth.
There was also some growth in the prudential sector and this is set to continue in 2005.
Health warning: Consult an expert if you have clients who wish to get invovled in collective investments, if you dont have the right experience.
