JOHANNESBURG – Investors ploughed R26 billion in net inflows to the local Collective Investment Schemes (CIS) industry in the second quarter of the year, with the combined value of assets in the sector racing towards R2.5 trillion at the end of June.
The CIS industry statistics for the quarter ended June yesterday showed that the growth net inflows pushed total net inflows for the year ended June to R96bn.
“At the end of June 2018, SA Multi-Asset portfolios held 50 percent of assets, SA Interest Bearing portfolios 26 percent, SA Equity portfolios 20 percent and SA Real Estate 4 percent,” Sunette Mulder, senior policy adviser at Association for Savings and Investment South Africa (Asisa) said.
Released “At the end of June last year, assets stood at R2.1trln, compared to the R2.3trln at the end of the second quarter this year”.
The figures, which were released yesterday, showed that 29 percent of the inflows into the CIS industry in the 12 months to the end of June came directly from investors.
Intermediaries contributed 32 percent of new inflows; institutional investors like pension and provident funds contributed 18 percent and Linked investment services providers generated 21 percent of sales.
Asisa said that locally registered foreign portfolios held assets under management of R518bn at the end of June. Maarten Ackerman, the chief economist at Citadel, said that the improved savings data would not make any marked positive economic impact.
“However, in the longer term it is important that we see the strength continue, because it supports confidence in the local economy,” Ackerman said.
In February, the Investec and the Gordon Institute of Business Science (Gibs) Savings Index, which measures South Africa’s savings rate and the country’s savings behaviour, showed a 60.5 percent headline index for 2017, the lowest in the country’s savings record in 27 years.
Gibs said that the economy needed an investment rate in excess of 30 percent to achieve elevated and inclusive growth that shaped competitiveness.
The index measured the performance of the South African economy in terms of its capacity to fund critical investment through savings Asief Mohamed, chief investment officer at Aeon Investment, said that most of the R96bn of net inflows into CIS over the 12-month period went into multi-asset funds.
“This is possibly an indication that these funds have to comply with regulation 28 of the pension funds act,” Mohamed said.
“The source of the funds may be from individuals who are retiring and whose policies with life companies are being cashed in. It appears that the legacy life assurers might still be experiencing net outflows and losing market share.”