Tuesday, 16 February 2016 - 20:00
Seed Weekly - Fund Flows
Saving and investment is a topical issue, both from a regulation and a personal goal perspective. Regulators are trying to put measures in place encourage individuals to save more as South Africa’s saving rates have been branded poor by global standards. Individuals are more cognisant of the importance of saving and investment, not to be ready for a rainy day, but also to achieve personal goals and attaining financial freedom. Collective Investment Schemes (CIS) are centre to this as they provide an important vehicle for investors to save.
We explore South Africa’s fiercely competitive CIS industry, focusing on the trend in fund flows. It is logical to assume that good performance is rewarded by inflows although financial economics argues that performance may not necessarily be persistent. In fact, it is well known that past performance does not guarantee future performance.
Historically, industry performance awards have been dominated by the largest players in the industry. However, recent trends suggest a shifting landscape in the industry with boutique managers receiving a lot more recognition. Investors tend to favour the “tried and tested” managers, which supports the managers that have been in the industry for longer. However, consistent good performance does not go unnoticed.
Chart 1: Growth in Local CIS Industry
The local Collective Investment Schemes (CIS) industry attracted inflows amounting to R109 billion in 2015 according to industry statistics released by the Association for Savings and Investment South Africa (ASISA). Multi-Asset investment portfolios, due to their greater diversification are unquestionably the preferred investment vehicle. Of the R1.9 trillion invested with the CIS industry, 51% is invested in Multi-Asset portfolios. Investors committed a total of R58 billion during the course of 2015, with the Income subcategory proving the most popular, followed by Low Equity category as investors exercised risk averseness.
Remarkably, on a global scale, single asset portfolios are more popular. $36 trillion is invested in CIS portfolios and of this, Equity portfolios (including property) form the bulk (42%), followed by Bond and then Multi-Asset portfolios (22% and 14% respectively). Locally registered foreign portfolios held assets under management of R364 billion at the end of December 2015, compared to R283 billion at the end of December 2014 and recorded net inflows of R2.4 billion over the 12 months to the end of 2015.
Chart 2: South Africa’s largest Managers (R’ million)
Assessing the net flows data from Morningstar paints an interesting picture for the largest Managers. The managers’ experienced net outflows, save for Nedgroup Investments that gained R15 billion in assets. Nedgroup Investments was a bigger winner at the recent Raging Bull awards, winning 5 category awards and the coveted, Management Company of the year. Their strategy to allocate management of specific mandates to different manages including boutiques seems to be working well. Boutique managers also won handsomely at the awards and as can be seen in the next section, good performing funds like the Rezco Value Trend Fund, are getting rewarded with net inflows for their good performance.
Chart 3: Estimated net flows as at 31 December 2015
Ranking the local CIS funds by 2015 net flows, gives results consistent with the notion that Multi-Asset portfolios are the preferred investment vehicle. The Rezco Value Trend Fund and Nedgroup Investment Opportunity Fund managed by Rezco and Abax respectively provide testimony to the growing popularity of funds managed by boutiques. The outperformance by boutique managers relative to their more accomplished counterparts is one of the reasons why they are gaining greater recognition.
As a reminder, it is important for one to have specific savings and investment goals. Matching return objectives, risk appetite and tolerance will help in determining which investments are appropriate for you. Multi-managers like Seed, offer solutions diversifying risk across different managers/funds/strategies to help you achieve your goals. Speak to your financial adviser to get more insight and work on attaining your investment targets.
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Tue, 16 Feb 2016
The JSE ended 0.93% lower on Tuesday, with losses led by resource and financial shares.
South African short-term insurer Santam said on Tuesday it expects to post increased full-year profits, partly due to improved sales, sending its shares higher.
The unit of long-term insurer Sanlam flagged a rise of up to 30 percent in headline earnings per share (EPS) to 1,880 cen
Turkey is asking allies including the United States to take part in a joint ground operation in Syria, as a Moscow-backed government advance nears its borders, raising the possibility of direct confrontation between the NATO member and Russia.
Austria will introduce quotas to limit the flow of migrants onto its territory and is preparing crowd-control measures at up to a dozen additional crossings in case a bottleneck prompts a shift in peoples' movements, it said on Tuesday.
Former U.N. Secretary-General Boutros Boutros-Ghali, whose term was marked by war in the former Yugoslavia, famine and genocide in Africa and confrontation with the United States, died on Tuesday. He was 93.
Shareholders are advised that Spur is expecting to report earnings as follows:
Six months to 31 December 2015, Six months to 31 December 2014 and % change
*EPS and diluted EPS (cents). . .
Strategic focus on world-class assets and sustainable positive free cash flow to strengthen balance sheet ű creating the new Anglo American
* World class core portfolio of assets in diamonds,. . .
Kumba shareholders are referred to the announcement today by Anglo American plc (˘Anglo American÷), at its annual results presentation, of its intention to exit its 69.7% shareholding in the Company, at. . .
World Markets (Spot Prices)
|JSE Top 40||17:00||43951.37||-427.73||-0.96%|
|JSE Indust 25||17:00||68378.05||-436.58||-0.63%|
|USD / ZAR||19:59||15.7417||0.0275||0.18%|
|GBP / ZAR||19:55||22.4767||-0.1832||-0.81%|
|AUD / ZAR||19:55||11.1847||-0.0325||-0.29%|
|USD / JPY||19:59||113.8930||-0.5500||-0.48%|
|EUR / USD||19:59||1.1137||-0.0026||-0.23%|
|GBP / USD||19:59||1.4303||-0.0133||-0.92%|
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The JSE Today
* Includes all listed instruments on the JSE
|Index Name||RP||Move||% Move|
|Financial & Ind. 30||71,274.94||-632.82||-0.88%|
|Oil & Gas ||7,195.69||.00||0.00%|
|Oil & Gas Producers ||38,689.88||.00||0.00%|
|Basic Materials ||18,556.95||-261.89||-1.39%|
|Forestry & Paper ||49,690.97||-519.80||-1.04%|
|Industrial Metals ||4,307.33||297.80||7.43%|
|General Industrials ||156.71||-1.69||-1.07%|
|Consumer Goods ||79,182.36||-865.03||-1.08%|
|Automobiles & Parts ||5,129.00||58.88||1.16%|
|Health Care ||8,780.57||-112.39||-1.26%|
|Index Name||RP||Move||% Move|
|Food Producers ||7,916.16||-246.74||-3.02%|
|Personal Goods ||1,024.33||-16.28||-1.56%|
|Consumer Services ||15,413.79||-47.24||-0.31%|
|General Retailers ||7,114.75||-89.75||-1.25%|
|Travel & Leisure ||5,181.35||19.68||0.38%|
|Support Services ||1,951.54||-48.91||-2.44%|
|Non-life Insurance ||51,044.42||3547.59||7.47%|
|Life Insurance ||35,974.70||-620.05||-1.69%|
|General Financial ||4,275.45||-82.15||-1.89%|
|SHARIAH TOP40 ||2,778.19||-14||-0.51%|
|FTSE/JSE SHARIAH ALL||3,043.56||-22||-0.71%|
|FTSE JSE Fledgling ||6,398.29||-4||-0.06%|
|FTSE/JSE Alt X ||1,524.88||12||0.78%|
|SA LISTED PROPERTY ||615.27||-0.28%|
|CAPPED PROPERTY ||547.37||-0.53%|
|FTSE/JSE RAFI 40||8,678.64||-91||-1.03%|
|Capped Top 40||23,379.37||-239||-1.01%|
|Capped All Share||25,166.57||-244||-0.96%|
|JSE TABACO ||11,018.94||-44||-0.39%|
Click here for the Sharenet Index Summary page
Latest Consensus Changes**
|KIO||KUMBA IRON ORE LTD ||BUY||15/02/2016|
|CML||CORONATION FUND MANAGERS ...||BUY||15/02/2016|
|WHL||WOOLWORTHS HOLDINGS LIMIT...||BUY||15/02/2016|
|AMS||ANGLO AMERICAN PLATINUM C...||HOLD||15/02/2016||
|Expected||Company Name||Fin. Date|
|17/02/2016||CAPREG||December 2015 (Final)|
|17/02/2016||DISTELL||December 2015 (Interim)|
|17/02/2016||EMIRA||December 2015 (Interim)|
|17/02/2016||TRNPACO||December 2015 (Interim)|
|17/02/2016||ZPLP||December 2015 (Interim)|
|GROUP 5||15/02/16||08/04/16||18/04/16||ZAR 0.4200|
|IMPL CONV||27/01/16||12/02/16||22/02/16||ZAR 250.0000|
|TBS||Tiger Brands Ltd.||16/02/2016||Confirmed|
|OCE||Oceana Group Ltd.||18/02/2016||Confirmed|
|RDF||Redefine Properties Ltd.||18/02/2016||Confirmed|
|QFH||Quantum Foods Holdings Ltd.||19/02/2016||Confirmed|
|RAR||Rare Holdings Ltd.||22/02/2016||Confirmed||
Stock Exchange News Service
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