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Looking good

03 November 2004 Angelo Coppola

Offshore foreign currency denominated equity funds attracted R2,1 billion from South African investors in the September quarter, Association of Collective Investments' statistics released today show.

This was double the June quarter total net inflows of just over R1 billion. The bulk of the inflows came from institutional investors (R1,3 billion) well up on the previous R365m.

ACI executive vice chairperson Di Turpin says the institutions are clearly bullish on the outlook for markets and have correctly been using the rand's relative strength to invest offshore.

Retail offshore equity investment, however still remains low key, totalling R780m in the quarter, although slightly higher than the previous R701m.

"With the rand still strong it is good opportunity for investors to diversify their portfolios offshore, lowering the overall investment risk."

Offshore fixed interest funds showed a R56 million (R115m) outflow by retail investors and infows of R89m (R412m) on the institutional side.

Total Foreign Investment Scheme assets were R47,6 billion (R48,9 billion) and with local funds this brings total industry assets to R334 billion.

The number of foreign funds declined from 343 to 327. Turpin says several funds were deregistered the past quarter as they were unable to comply with the strict Financial Services Board regulations governing offshore funds.

"In many respects such as trustees, South African regulations - designed to protect the investor - are far stricter than of those offshore."

Quick Polls

QUESTION

As National Treasury mulls a two-bucket retirement system, mandatory contributions and preservation, regulation 28 is being amended to allow up to 40% of retirement fund assets to be invested in SA-based infrastructure… Which of the following retirement fund ‘tweaks’ would you consider most beneficial to your clients?

ANSWER

Give fund members emergency access to retirement savings
Let fund members invest 40% in infrastructure
Let fund members invest 40% offshore
Mandatory preservation when resigning from a fund
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