Warning from one of South Africa’s top asset managers

Coronation Fund Managers expressed concerns about South Africa’s lacklustre economy in its recent interim results for the six months through March 2025.

The asset manager noted that the South African savings and investment industry has been contracting for well over a decade. 

Coronation attributed this to the country’s high unemployment, significant indebtedness, and low economic growth, among other factors. It warned that industry outflows will continue until the country sees sufficient growth.

Despite these domestic challenges, Coronation reported strong results for the first half of its 2025 financial year.

The asset manager said these six months were marked by heightened market volatility, as the United States administration’s stance on trade tariffs and protectionism created significant uncertainty in an increasingly polarised world. 

“In South Africa, these global tensions were exacerbated by disagreement within the Government of National Unity (GNU), driven by dissent over the 2025 Budget,” it said. 

“This unwound much of the positive re-rating we had seen after the formation of the GNU following the 2024 national election.”

However, the asset manager delivered solid interim financial results despite these challenging circumstances. 

As at 31 March 2025, 92% of Coronation’s funds have outperformed their benchmarks since inception. Coronation said it is optimistic about the strong recent recovery in its global portfolios.

In addition, the asset manager’s long-term outperformance in its South African portfolios remains outstanding at 98%.

Fund management earnings per share attributable to ordinary shareholders were up 8% at 200.2 cents, compared to 185.8 cents in March 2024. 

Coronation’s total assets under management (AUM) increased marginally to R676 billion (30 September 2024: R667 billion), while average AUM increased by 9% to R677 billion.

Positively, the asset manager noted that net outflows moderated year on year from 4% to 3% of average AUM. 

“While this is encouraging, we note that the South African savings and investment industry has been contracting for well over a decade,” it said. 

“This is due to high unemployment, significant indebtedness, and low economic growth, among other factors.” 

“We expect industry outflows to continue until we see sufficient economic growth to reverse these trends.”

Coronation declared an interim dividend of 200 cents per share.