Investing

South African asset management industry hits record high

The local Collective Investment Schemes (CIS) industry ended 2023 with R3.5 trillion in assets under management, a new record for the industry. 

This was revealed by the Association for Savings and Investment South Africa (ASISA), which said this represents an 11.34% growth in assets from the end of 2022.

Senior policy adviser Sunette Mulder at ASISA said the growth can be attributed to market performance and net inflows of R110 billion in 2023. The JSE All Share Index delivered a return of 9.3% last year.

The data showed that local asset managers experienced net outflows of R2 billion in 2023 when reinvested dividends were excluded. 

Mulder said investor appetite ebbed in the fourth quarter of 2023, resulting in net outflows. Elevated interest rates and the rising price of petrol resulted in South Africans saving less or not saving at all. 

Nearly half of all assets under management are invested in multi-asset portfolios, where savings are exposed to equities, fixed-income assets such as bonds, and real estate. 

A small portion of local assets under management are still invested in equity-only portfolios, at around 19% of all assets – despite these being the best-performing funds over the past 20 years. 

The table below breaks down the best-performing types of funds South African asset managers offered over the past year, five years, ten years, and twenty years. 

1-year performance to end 20235-year performance 10-year performance20-year performance
SA Multi Asset High Equity12.5%9.3%7.2%11.6%
SA Equity General7.9%9.5%7%12.6%
Inflation 5.5%5.1%5.2%5.5%

In contrast to other funds, interest-bearing portfolios attracted R70 billion in net inflows in 2023, of which R22 billion was channelled to SA interest-bearing money market portfolios. 

Mulder pointed out that the net inflows into money market portfolios fluctuated wildly from quarter to quarter last year depending on risk appetite and opportunities available in the market.

Locally registered foreign portfolios held assets under management of R855 billion at the end of December 2023, and these portfolios recorded net outflows of R23.38 billion for the year.

South African investors had a choice of 1,832 local CIS portfolios at the end of December 2023, an increase of 63 portfolios over the 12 months.

Worldwide, there were 139,160 CIS portfolios with total assets under management of $63.4 trillion as of the end of September 2023. 

There are currently 684 foreign currency-denominated portfolios on sale in South Africa.

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