Still bullish

Offshore investors remain bullish on the outlook for equities investing some $124bn in the first quarter of this year according to the latest global unit trust figures.

Association of Collective Investments chief executive Colin Woodin says the stepped up investment in equities was led by US investors who channeled $90bn into equity unit trusts bringing the net flow to $156bn over two quarters.

The figures are compiled quarterly by the US Investment Company Institute and cover 54 640 funds.

Local investors are still far more conservative when it comes to equities than their offshore counterparts and are investing more in fixed interest: Globally some 23 percent of assets were invested in money market funds - the comparable South African figure is 35 percent.

While globally money market funds had a $6bn outflow mainly due to $49bn exiting US funds, SA had positive flows of nearly R6bn.

Woodin says that local investors should ensure they have a well balanced and diversified portfolio which will enhance performance and reduce risk rather than focusing on any one sector.

But money market investments have become a major segment of unit trust flows with private and corporate investors channeling funds into the industry.

Last year annual flows totalled R144,4bn - up 57 percent on the previous year.

"Flows this year remain strong. We are seeing increasing demand from corporate treasurers who view the money market unit trusts as being the ideal vehicle for parking short term funds and the total net inflows into these unit trusts have doubled in the past four years."

The ICI says globally bond funds had a substantial $39bn inflow in the first quarter after a small net outflow in the final quarter last year. Locally bond inflows fell from R3bn to R1,1bn.

Overall net flows into all funds soared from $74bn in the fourth quarter to $246bn with global assets up 3,6 percent to $14,46 trillion.