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Offshore Investments
Friday, June 1, 2007
Mostly equity

Institutions invested more than R1,4 billion offshore in the March quarter - a sharp rise on the R168 million in the previous three months.

Association of Collective Investments chief executive Di Turpin says while institutional investments soared total retail flows were well down at R719m as against R2,4 billion in the December 2005 quarter.
The bulk of the institutional flows went to equity funds – R1,5 billion as against R357m with retail equity flows well down at R834m (R2,2 billion). There were small outflows from Asset Allocation and Fixed Interest funds during the quarter.
“Offshore equity funds could attract more attention this year with the local market at historical highs and no longer at the cheap levels of a year ago.
“Investors have favoured the local equity market due to the exceptional returns over the past few years on the back of strong corporate earnings growth and a firm resources sector but, a renewed weakening of the rand could boost returns on offshore funds.
“Returns from both offshore and onshore equity funds were around 33 percent this year, but more modest performance is likely from local domestic funds in 2007. Foreign fund performance will largely hinge on the trend of the rand.
“It is certainly a prudent policy to have some offshore diversification in portfolios – the degree will depend on individual circumstances.”
The number of foreign currency denominated funds rose to 372 (366) during the quarter with total assets of R105,1 billion (R95,1 billion).

Copyright © Insurance Times and Investments® Vol:20.5 1st June, 2007
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