Multi-asset funds most popular
WITH market volatility the norm rather than the exception, new unit trust figures show that South African investors are increasingly trusting their investment decisions to the professionals.
According to the Association for Saving and Investment South Africa, the collective investment schemes industry — unit trusts — attracted a net inflow of R57-billion during the third quarter ended September 2013.
The vast majority of these funds flowed into the multi-asset category, which remains the most popular with investors because it invests in a range of assets — from equities and property to fixedincome and offshore assets.
Specialist funds, by contrast, invest in only one asset, such as JSE- listed equities. Nearly two-thirds of the new inflows — R35-billion — went to multi-asset funds.
Over the year to September, the inflows into multi-asset funds came to R110-billion.
One of the firms that has a vantage point over industry inflows is Investment Solutions, the largest multimanager in the country.
Muitheri Wahome, head of technical services at Investment Solutions, said the company had picked up on this trend.
“We’ve certainly noticed this increased interest in multi-assetclass portfolios. From the perspective of a financial adviser, they’re generally happier to leave the asset allocation to the asset manager, [who] can focus on assessing the risk needs of a client,” he said.
“We’ve also noticed from our institutional investors that there is a flow of money towards these kinds of funds.
“You will find that even the smaller guys will opt to invest in multi-asset portfolios, the major reason being diversification.”
Candice Paine, head of retail at Sanlam Investment Management, said the move towards multi-asset funds was for two reasons.
“What we’ve been seeing for a couple of years now is that people no longer want to make asset allocation decisions themselves. They want to leave it to professionals,” she said.
“Clients who are incredibly conservative — those sitting on cash — are starting to take on a little bit more risk in these multi-asset portfolios because they know they’re not going to get positive real returns from cash going forward.”