Old Mutual funds beat their benchmarks

Over 80% of Old Mutual’s investment funds outperformed their benchmarks over the past year. The outperformance declines over time, with fewer funds outperforming their benchmarks over three years and less than two-thirds outperforming over five years. 

In Old Mutual’s analyst presentation, data was presented detailing the performance of their investment funds compared to their benchmarks. 

This data included the percentage of Old Mutual’s funds outperforming their benchmarks in 2020 versus 2022 over a 1-year, 3-year, and 5-year period. 

81% of Old Mutual’s funds outperformed their benchmarks over one year. This outperformance declines over the medium to the longer term, with only three-quarters of funds outperforming over three years and less than two-thirds outperforming over five years. 

The data further showed that Old Mutual’s funds are improving in performance, one of Old Mutual’s stated commitments it wishes to deliver to clients.

The table below shows the percentage of Old Mutual funds that outperformed their benchmarks over 1-year, 3-years, and 5-years in 2020 versus in 2022.

Funds under management continue to decline

Even though Old Mutual’s funds have outperformed their benchmarks, their funds under management (FUM) have continued to decline. 

In their results for 2022, FUM declined by 4% to R1.2 trillion following a decline of 7% in their interim results. 

Old Mutual’s CEO, Iain Williamson, said that this decline is “driven by flat markets and by net client cash outflows, primarily from institutional counterparties seeking liquidity”. 

Despite decreasing FUM and a “difficult operating environment”, Old Mutual’s results from operations increased by 100%, almost matching 2019 levels. 

However, their pre-tax profit dropped by more than 30% – declining from R13.42 billion in 2021 to R9.15 billion in 2022.