Have balanced funds changed investor behaviour?

South African investors have had to deal with very muted returns for the better part of the last five years. Between July 1, 2013 and June 30 2018, the average return from unit trusts in the South Africa multi-asset high income category was just 8.2%.

This was a mere 2.8% ahead of inflation for this period. Given that these balanced funds would ordinarily be expected to produce returns of at least CPI + 5% over a five-year period, this is obviously disappointing.

What is notable, however, is that despite this situation investors have continued to favour these strategies. The latest statistics from the Association for Savings and Investment South Africa (Asisa) show that multi-asset high income funds continue to be the main savings vehicle for most people invested in local unit trusts.

At the end of June this year, the assets of funds in this category increased to above 25% of all assets in South African collective investment schemes for the first time. As the table below shows, it is the only major fund category to have shown consistent growth in both terms of assets and as a percentage of the total over the last five years.

 

Proceed to Source : MoneyWeb

CIS industry assets racing to R2.5 trillion

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.

Proceed to Source : IOL

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Why your retirement dreams are crashing around you

On paper, all retirement planning is perfect. You punch in a couple of numbers into a computer, make some assumptions on contributions, time period and growth on your investments and voila!, the answer comes back in an instant: you are on track or if you are not, the computer programme will tell you how to fix it by making additional investments or working longer.

All retirement planning programmes that I have ever done or seen, assumes an inflation-beating rate of return, depending on how bullish you might have felt about the future performance of your particular investment strategy. Most assume inflation plus 3, 4 or 5% in making these calculations.

Proceed to Source – MoneyWeb

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Voluntary retrenchment plan for public sector workers – Test for Default Pension Fund Regulations

Legalbrief Today recently commented as follows on a Business Day article:

Thousands of public sector workers over the age of 60 will be offered voluntary retrenchment as part of an effort by the government to cut its salary bill. A Business Day report says the decision to offer voluntary severance packages – the first such offer in 20 years – follows the conclusion of a new three-year wage agreement last week that bust the budget by about R30bn.

Proceed to Source : Insurance Gateway

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Comparison of retirement fund costs: challenges faced by decision-makers

New standardised disclosure measures will expose hidden costs and fees in retirement fund products

Layers of fees and costs in the retirement fund industry, combined with a lack of standardised disclosure, have left employers and trustees struggling to compare products in this market.

The new Association for Savings and Investment South Africa (Asisa) standard on fee disclosure for retirement funds is aimed at improving transparency across the entire retirement industry.

Proceed to Source : Business Live

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