Despite significant local and global market volatility spilling over into the third quarter of 2022, assets under management (AUM) by local collective investment schemes (CIS) moved back into the R3 trillion territory after dropping to R2.98 trillion in the second quarter of 2022, the Association for Savings and Investment South Africa (Asisa) says.
The local CIS industry reached the R3 trillion milestone in the fourth quarter of last year, finishing 2021 with R3.14 trillion in AUM. By the end of September 2022, AUM had returned to R3.01 trillion.
Statistics for the quarter and the year to 30 September 2022 also show that the local CIS industry attracted net inflows of R39 billion in the third quarter of this year, bringing total net inflows for the 12 months to the end of September to R121bn.
Asisa senior policy adviser Sunette Mulder said the third-quarter net inflows of R39bn were the strongest reported by the industry since the fourth quarter of 2020, when the industry attracted R44bn.
She said it was noteworthy that the healthy net inflows (dividends reinvested and new money) were achieved in a volatile environment.
“After a strong but brief rally in July this year, stock markets in most jurisdictions, including South Africa, declined sharply, mainly due to global inflation fears and slowing global growth,” Mulder said.
For the year to 30 September 2022, the FTSE/JSE All Share Index returned 3.5%, the S&P 500 returned 1%, and the FTSE 100 a negative return of 0.2%.
Investors favour multi-asset funds
Given the ongoing market volatility, it was not surprising that investors continued to favour South African multi-asset portfolios in the third quarter, Mulder said. These portfolios provide diversification across asset classes within a single fund.
The South African multi-asset category comprises 774 portfolios and holds 49% of total industry assets.
According to Mulder, the category attracted R66bn in net inflows for the 12 months to the end of September 2022, the highest in six years.
Investors opted predominantly for multi-asset income portfolios (R26.1bn in net annual flows), followed by multi-asset high-equity portfolios (R23.6bn).
The South African interest-bearing category recorded net inflows of R26bn, while South African money market funds attracted net inflows of R5bn.
Portfolios in the South African equity category received net inflows of R2bn for the 12 months to the end of September 2022.
Foreign portfolios
Locally registered foreign portfolios that submit information to Asisa held AUM of R665bn at the end of September 2022, up from R638bn at the end of the second quarter of 2022.
These foreign portfolios recorded net inflows of R0.5bn for the quarter to the end of September. Total net inflows for the year to 30 September came to R24.8bn.
There are currently 623 foreign-currency-denominated portfolios on sale in South Africa.
