Some sense at last...

Private investors earmarked more than R1.3bn for foreign currency unit trusts in the December quarter which could be the first indication that local investors are taking advantage of the strong rand to invest offshore.

Di Turpin, CE of the Association of Collective Investments says while it is too early to talk about a new trend, the inflows are in marked contrast to previous quarters when private foreign investment has been neglected.

“With the local market in a mature stage and overall far from cheap, investors seem to be looking for new opportunities offshore. It is significant that virtually all of the private investment went into equity funds with the stake in the fixed interest funds being cut.

“This is the first quarter since June 2001 that we have seen private offshore equity investment of more than R1bn.”

Apart from the equity investment, private investors channeled R100m into asset allocation funds during the quarter.

Institutions also stepped up their offshore investment with an additional R1.12bn channeled into unit trusts. Of this R660m went into equities and most of the rest into fixed interest funds.

Total assets of the foreign collective investment schemes were R46bn with the number of funds totaling 321.