for Savings and Investment SA says South African investors put R10bn into equity funds for the 12 months to end-June but pumped R59,2bn into money market funds.
While investors opting to move into money market funds may perceive that to be a prudent approach to protect wealth, they often don’t realise they’re in fact guilty of reckless conservatism,” says Nico Coetzee, head of sales at PPS Investments, the investment arm of the Professional Provident Society. Coetzee says by ignoring the stock market, investors in money market funds over the first half of the year have already lost out on the recent strong recovery. The JSE All-Share index gained 8% in second quarter 2009 and almost 38% since the market lows at the beginning of March. “Even the most prudent investors should consider some form of equity exposure. Conservative, low-risk funds offer investors a balanced approach to risk,” he says.