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The numbers remain astounding

19 January 2006 Angelo Coppola

There are some trends in the collective investments sector, although the average performance and returns is at least in the region of 25%. And this isnt a flash in the pan - over the last five years the numbers are phenomenal. The only laggard is the mone

According to Di Turpin, CE of the Association of Collective Investments (ACI), the asset managers were under pressure because of the constraints they have, but the individual investors in general equity funds were getting 14% compounded return for the last 10 years.

The fuss really is that the money is flowing in a certain direction, and Turpin says that some caution should be exercised as there are investors that havent fully benefited from these returns. The asset allocation, money market and fixed interest sectors are the big beneficiaries of fund flows.

The prudential funds and the flexible and real estate and targeted real return funds have turned around over the last couple of years, with the prudential sector funds taking in R36bn in the last quarter.

It also seems that unit trusts are also being increasingly used as a means to provide for pension and retirement income.

Interestingly 20 new funds have hit ht streets in the last quarter, with the total collective investment business with assets of just under R470bn, an increase of 36% over the last 12 months. There is a downward trend in equity investments with investors looking for some guarantees. The majority of the funds are domestic.

There are also unconfirmed reports that at least 70 funds are waiting in the wings at teh FSB for approval.

Turpin says that while markets have been running, investors are not following the market, as they have in the past, which is an interesting and very strong trend at the moment. Either investors are unaware of their performance or the increased influence that financial advisors have on their clients investment decisions.

It also seems that the level contributions are higher than the lump sum levels for the past year, which is an interesting trend in itself, and something that the ACI is investigating to determine the reasons for.

It the association also reports that R11.7bn came in during the last quarter, of a total of R57bn for the year, and while not the record month, still contributing to the total for the year. 45% of assets are sitting in fixed interest and investors are generally well placed to take advantage of a market change.

Broker funds now constitute 20% of the total unit trust universe or R120bn of the pie and Turpin says that these so-called third party funds will hopefully be drawing the retail investors back into the unit trust sector.

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