Investor confidence recovered in the third quarter of this year, resulting in net inflows of R5 billion into the local collective investment schemes (CIS) industry over the three months to the end of September 2024, according to statistics released yesterday by the Association for Savings and Investment South Africa (ASISA).
Existing investors reinvested income declarations (dividends and interest) worth R37.3bn. This brought the total net inflows for the three months to the end of September 2024 to R42.3bn and R86bn for the 12-month period.
Assets under management increased to R3.8 trillion in the third quarter, a growth of 4.3% from the end of the second quarter of 2024, when assets stood at R3.64 trillion. Over the 12 months to 30 September, assets grew by 13.7%, driven primarily by stock market performance.
Sunette Mulder, senior policy adviser at ASISA, said that following the net outflows of R6bn (taking into consideration reinvestments of R24bn) in the second quarter of this year, the third quarter recovery in net inflows was good news.
“Towards the end of the second quarter and early in the third quarter, much of the investor anxiety had worked itself out of the system following a solid period of no load-shedding, a peaceful transition to a Government of National Unity and the well-managed implementation of the two-pot retirement system.”
Locally registered foreign portfolios held assets under management of R913bn at the end of September, compared to R899bn at the end of June 2024. At the end of September 2023, AUM management stood at R765bn.
These portfolios recorded net inflows of R4.1bn for the third quarter ended, following net outflows of R2.4bn in the second quarter. Over the 12 months to the end of September, locally registered foreign portfolios recorded net outflows of R2.6bn.
Investor trends
At the end of September 2024, 19% of AUM were held in South African equity portfolios, while SA interest-bearing portfolios held 30% of assets. Half of all assets (50%) remained in SA multi-asset portfolios, with the rest in SA real estate portfolios (1%).
The most popular category with investors over the 12 months to the end of September was SA interest-bearing short term, which attracted R40.7bn of the R86bn in net inflows, Mulder said.
The least favourite category was the SA equity general, which recorded net outflows of R11.3bn over the 12-month period under review and only a small net inflow of R1.9bn in the third quarter.
According to Mulder, this is not surprising given the uncertain investment climate that prevailed for a large part of the 12 months to the end of September 2024.
Unfortunately, this also meant that jittery investors missed out on a solid equity run despite the volatility, which resulted in an average return of 21.8% for the SA equity general category over the 12 months to the end of September, Mulder said.
The SA interest-bearing short-term category delivered an average return of 10.1% over the same period.
Mulder said that the SA interest-bearing variable-term category, not often seen at the top of the performance tables, delivered a performance of 24.3% over the one-year to the end of September 2024. Only 6% of CIS assets under management are held in SA interest-bearing variable portfolios.
