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Collective Investments
Thursday, February 1, 2007
Life’s lessons

Collective Investments boomed last year as net inflows topped the R58,2 billion mark setting an industry record while total assets rose to a new peak of R546,7 billion.

Inflows for 2006 were bolstered by a strong December quarter which saw R16,1 billion of new money being invested - not far off the all time peak of just under R20 billion in the September quarter. Figures released by the ACI show that over the past three years the industry has attracted a net R159 billion.
“It has been a great year for the industry and performance has been excellent,” says Di Turpin ACI Chief Executive.
“Consider that the top performing general equity fund returned 34% a year over the five years to December, and even the average fund achieved 37% over the past year as well as the last three years.”
Retail investors net flows were R12,9 billion in the December quarter (R13,3 billion September quarter) while net institutional flows were down at R3,2 billion (R6,5 billion).
“But in spite of the strong market investors and their advisors continue to be conservative when making their choices, preferring managed funds to pure equities. This is reflected in the Domestic Equity fund outflows of more than R2 billion as against the strong inflows of R7,7 billion in asset allocation funds.
“Fixed interest varied specialist funds continued to be big money attractions, raking in R4,4 billion over the quarter. Prudential Low Equity funds attracted R1,9 billion, with Medium funds at R2,4 billion and Flexible at R870 million. In contrast Prudential High Equity inflows were only R226 million. Targeted, Absolute and Real Return funds had inflows of R2,2 billion (R1,68 billion).
“Investors continue to be well positioned for any future downturn in equity markets but may not have benefited as much as they could have from the wonderful returns in recent years.”
Among domestic funds General Equity attracted R594 million and the Value sector R338 million. But there were outflows from Large Caps (R931 million), Industrials (R834 million), Financial Services (R785 million) and Foreign Fixed interest bond funds (R750 million).
Money Market fund inflows at R5,5 billion were down on the previous quarter’s R8,2 billion and represent 35% of industry assets.  The number of funds reached 750 (707) with 33% of them offered by third parties.

Copyright © Insurance Times and Investments® Vol:20.1 1st February, 2007
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