Value of SA unit trust assets tops R3-trillion again
• Strong third-quarter inflows help, says Asisa’s Mulder
SA collective investment schemes, or unit trusts, saw their assets under management climb back above the R3-trillion mark in the third quarter despite volatility in financial markets worldwide during that period. Figures released by the Association for Savings and Investment SA (Asisa) show this was thanks to net inflows of R39bn in the quarter. Sunette Mulder, a senior policy adviser at Asisa, says thirdquarter inflows were the strongest since the final quarter of 2020.
SA collective investment schemes (CIS), or unit trusts, saw their assets under management (AUM) climb back above the R3-trillion mark in the third quarter despite volatility in financial markets worldwide during that period.
Figures released by the Association for Savings and Investment SA (Asisa) on Thursday show the CIS industry’s assets rose to R3.01-trillion at the end of September thanks to net inflows of R39bn in the third quarter.
The local CIS industry first passed the R3-trillion milestone in the fourth quarter of 2021, when it finished the year with R3.14-trillion in AUM.
However, the severe effect of the Russia-Ukraine war, inflation accelerating worldwide and central bank interest rate hikes on financial markets in 2022 saw local CIS assets decline throughout this year, down at R2.98-trillion in the second quarter.
Sunette Mulder, a senior policy adviser at Asisa, says strong third-quarter inflows, which were the strongest since the final quarter of 2020, helped push the local unit trust industry’s AUM back above the R3trillion threshold.
“It’s been a tough year for local equities,” said Mulder.
“The industry’s assets under management are impacted by the performance of the stock markets, and the fact that assets managed to move back above the R3-trillion threshold highlights the incredible resilience of our industry.”
The MSCI world index, a measure of global equity performance, has dropped about 17% so far in 2022 as the Ukraine crisis, rising living costs and aggressive central bank rate hikes across the world curbed investor appetite for higheryielding assets. By contrast, the JSE all share index is down less than 1% in the year to date, though at end-September its performance for the first nine months of the year was -13.5%.
Market volatility in the nine months to end-September saw investors favour SA multi-asset portfolios in the third quarter. Portfolios in the local multi-asset category are designed to provide diversification across a variety of assets ranging from stocks and bonds to cash and property.
The SA multi-asset category, which comprises 774 portfolios and holds 49% of total industry assets, attracted R66bn in net inflows in the 12 months to endSeptember, the most in six years. Portfolios in the SA Equity category received net inflows of R2bn for the 12 months to the end of September 2022.
Locally registered foreign portfolios that submit information to Asisa had a combined AUM of R665bn at end-September, up from the R638bn held at the end of the second quarter of 2022. These foreign portfolios recorded net inflows of R500m for the third quarter while total net inflows for the 12-months to end-September were R24.8bn.
Foreign-currency-denominated unit trust portfolios offered by foreign unit trust companies can only be actively marketed to SA investors if registered with the Financial Sector Conduct Authority (FSCA). Local investors wanting to invest in the 623 foreign-currencydenominated portfolios available in SA must also comply with Reserve Bank foreign-exchange regulations.