Huge

Di Turpin from the ACI reports that this was a record-breaking quarter, with inflows up 68% to R18.5bn, and assets under management reached R348bn.

Having said that the sector isn’t a big player yet. The total investment sector – including all retirement funds is estimated to be in the region of R1 trillion. This excludes the bank deposit sector which an analyst says could be anything between R100bn to R200bn.

Hidden behind the numbers and inflows is the fact that planners and advisors are starting to make their presence felt, as they begin to operate within the confines of FAIS and FICA.

The chairman of the ACI, John reports that there has been an ongoing increase in money market funds – which masks the fact that there is corporate money going in and there are some structures that also make use the money market funds.

The equities contribution to the funds dropped in the current quarter. Having said that he says that it seems that there has been an increase in asset allocation funds and investors would have caught some of the equities run.

Asset allocation as an asset split deserves a closer look, because it has climbed significantly. The planners are increasingly turning to investment managers to build portfolios – especially in the flexible fund sector, and the absolute and real return funds.

The flexible property sector is also showing growth, but close management is needed. The planners are also involved in this sector, advising their clients. He maintains though that the strong financial planning communities in SA, New Zealand and Australia have led to the development of similar asset splits in unit trusts/mutual funds.

Interestingly enough management companies have reduced in number while funds have more than doubled – from 204 in 1998 to 570 in June.

The foreign collective investment schemes sector has been increasing steadily – contributing R53bn, and pushing the AUM to more than is administered by the private pension funds.

The number of institutional funds have increased, growing from R19bn to R85bn since 2001.

Onto the bond sector, and he was pleasantly surprised as on average the bond sector had out-performed their benchmark by 4%.