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Staggering growth for SA unit trust industry

23 June 2015 Shaun Ruiters, Sanlam Investments
Shaun Ruiters, Head of Retail Strategy & Client Solutions, Sanlam.

Shaun Ruiters, Head of Retail Strategy & Client Solutions, Sanlam.

Asisa has just released its Q1 2015 unit trust data and the first thing that strikes you is the staggering growth of the industry. At the end of 2005, the SA unit trust industry’s assets were just short of R250 billion. Now, less than 10 years later, the industry’s AUM has grown sixfold to more than R1.8 trillion!

Considering only flows into retail unit trust funds, the money market category lost nearly R6 billion during the three months to 31 March 2015, but this was more than offset by the R24.34 billion inflows into other retail unit trust funds, resulting into net inflows of R18.35 billion for Q1 2015. Looking at how this compares to previous quarters, the R24.34 billion for retail unit trust funds (excluding money market) was the lowest quarterly net flow since Q2 2012. Interestingly, money market funds have been losing money since Q3 2014 (after the ABIL saga), but this has been decreasing over Q4 2014 and Q1 2015.

Investors turn to IFAs and insurers

For several years independent financial advisers (IFAs) have been leading retail clients into unit trust funds via linked investment platforms and IFAs are still responsible for large flows into unit trusts. For the past two years insurers’ tied agents have been playing catch-up, though, and are now short on the heels of IFAs.

Where is all the money going?

When analysing retail flows only, i.e. when one excludes institutional unit trust fund classes and money market funds, most of the money is still flowing into the SA Multi Asset funds, particularly the High Equity and Low Equity categories. The SA General Equity category also experienced net inflows, but remains a low attractor of flows.

  • The bubble chart below illustrates the status of each category and:
  • The Y-axis shows the 12-month net flow market share of each asset category.
  • The size of the bubbles shows the AUM market share of each category.
  • The X-axis shows the number of funds that had non-zero AUM as at the end of Q1 2015.

The SA Multi Asset – High Equity category remains tops with regards to capturing net flows in the industry, but there was a rise in the net flows into other categories.

Where does Sanlam Investments (SI) fit in?

There has been tremendous growth of SIM funds and SIM Managed funds, and there is an increasing growth trend of SMMI assets. SI share of market has been hovering around the 6% mark over the past few quarters. One year ago our assets under management were less than R80 billion. At 31 March 2015 this figure exceeded R95 billion, with net inflows accounting for more than R8 billion of the growth. SI is now one of the fastest growing asset managers in the unit trust industry.

 

 

 

 

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