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Collective Investments
Monday, March 1, 1999
Number of funds top 200

Sales for 1998 reached a record R63,9 billion, according to the Association of Unit Trusts (AUT). It says this amounts to “an exceptional compound growth rate of 6,8% per annum over the past five years.”
Sales for the fourth quarter were also a record, totalling R17 billion, marginally up on the R16,9 billion of the third quarter. Following the sharp drop of equity values in the third quarter and continuing market volatility, investors adopted a cautious approach to the traditional longer-term unit trusts — reason why sales of money market funds were boosted to a record R8,7 billion for the fourth quarter.
Repurchases of the longer-term funds reduced significantly during the December quarter with a resultant net inflow of R1,7 billion in this period. When combined with the money market funds, net inflows totalled R5,5 billion for the quarter, the second highest quarterly net inflow ever.
Total assets of the money market fund sector increased to R12,2 billion, 17,2% of total industry assets.
“The increased investment into money market funds is a reflection of the high shorter term money market rates and equity market caution,” says Cohn Woodin, executive director AUT.
Inflows and generally positive performance statistics from all sectors except gold funds during the quarter increased total assets under management to R71,3 billion at year-end, 15,2% higher than at the previous quarter end and 15,5% more than the end of 1997.
The industry’s expansion is also reflected in the growth of the number of funds to over 200 during the quarter compared with 149 the previous year.
The adverse performance of the Johannesburg Stock Exchange during the year obviously affected the performance of most equity-based unit trusts with most showing negative total returns. However, major exceptions to this were:
• international funds, where the average return for the past twelve months was 35,9%; over 3 years 28,8 per annum; and, over 5 years, 16,9% per annum.
• the smaller companies sector, with an average return of 15,7% for the year, and 21,5% per annum for 3 years;
• gold funds with 30,5% for the year, but with negative returns for the past 3 and 5 years;
• income and money market funds performed well over the past year period with returns of 14,7% and 16,1% respectively.

Copyright © Insurance Times and Investments® Vol:12.2 1st March, 1999
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