Sygnia’s assets under management increase to R162bn

JSE-LISTED financial technology company Sygnia has reported a 1.89 percent increase in total assets under management to R162 billion in the quarter to the end of June, up from R159bn reported at the end of March.

The group said the quarter was weighed down by political uncertainty, which had a bearing on the economy and investment returns.

“Despite that, Sygnia grew its assets under management from R159bn as at March to R162bn as at June, largely on the back of institutional appointments,” Sygnia said in a statement.

The group said it had also secured R3.7bn in institutional investment administration and asset management appointments, which were expected to move to Sygnia in the third quarter of this year, as well as R2.4bn in Sygnia Umbrella Retirement Fund (SURF) appointments, which, subject to regulatory approval, would be transferred to SURF in the third and fourth quarters of this year.

Sygnia said all areas of the business were progressing well, with SURF becoming a major source of new asset management appointments for the company.

“Our independent-consultant-friendly business model, our highly advanced technology platform and the fund’s superior benefit design have made SURF a highly attractive proposition for stand-alone retirement funds and participating employers in umbrella fund arrangements,” the company said. “We also continue to look for strategic acquisitions in this area.”

The group said the acquisition of db X-trackers added R12bn to assets under management with effect from July 1, and that this would enhance Sygnia’s earnings significantly.

“We expect to unlock more value from the acquisition by restructuring some of the outsourced services in due course. Although more competitors are emerging, offering exchange traded funds (ETFs) referencing foreign assets, most are feeder-fund structures rather than directly managed ETFs,” the group said.

Sygnia provides asset management, stockbroking and administration services, as well as a range of savings products to institutional and retail clients.

The group said the db X-tracker ETFs would be rebranded as Sygnia Itrix ETFs as soon as possible.

The group said its ETFs had the advantage of a tiered management fee structure. This meant that large investors paid significantly lower management fees than those published in the total expense ratio calculations.

Sygnia said it planned to broaden its range of ETFs, with the launch of offshore and domestic ETFs planned for the third quarter of this year.

“This will include the Sygnia Itrix 4th Industrial Revolution Kensho ETF, which tracks an index comprising companies involved in the development of products and services in the fields of 3D printing, drone technologies, quantum computing and autonomous vehicles,” the group said.

The group said it wanted to launch these products with the lowest management and platform fees, in order to lower the cost of accessing the ETF market for retail and institutional investors, and to make that segment of the market more appealing to investors interested in index-tracking investment strategies.

Sygnia shares rose 3.15 percent on the JSE yesterday to close at R11.17.