ASISA Unit Trust Update - Q2 2023
ASISA released their latest industry statistics detailing collective investment scheme flows in South Africa to the quarter ended 30 June 2023.
With rising interest rates, income assets have become much more attractive to investors. This is reflected in the South African Multi-Asset Income category showing the highest net inflows of our Multi Asset categories for the last year running. In the last quarter, Multi-Asset High Equity net inflows were close to R3bn lower than in the previous quarter, while the Medium and Low Equity category saw very small net flows of around R300m each.
Over the 18 months to end June 2023, the Multi Asset Income category outperformed each of the Multi Asset Low, Medium, and High Equity categories. However, year-to-date the higher risk categories have delivered higher returns, with the Multi Asset High Equity category returning 7.4% in aggregate, compared to Multi Asset Income generating 3.7%.
Equity managers have seen lacklustre flows over the last year in the South African, Global, and Worldwide mandates. For Q2 2023, the South African category saw small net outflows of R200m, while the Global category, which requires at least 80% of assets to be invested offshore, saw outflows of R3.5bn. The Worldwide category, which has no restrictions on local or foreign investment, saw small net inflows of R287m.
In the Global Multi Asset categories, all categories bar Multi Asset Income saw net outflows over the quarter. Multi Asset Flexible is the largest of the Global Multi Asset categories, with just under R50bn of AUM. This category saw R1.3bn of outflows over the quarter, and has seen three quarters in a row of net outflows. The Global Multi Asset category has seen three quarters of consecutive net inflows, in the second quarter of 2023 amounting to R123m or 2% of Q1 AUM of R5.6bn.
The top 10 recipients of net inflows consisted largely of Income and Multi-Asset Income funds, echoing the previous statistic. Fairtree was the highest-ranking active equity manager in terms of net inflows over the quarter.
At the other end, 3 Money Market funds feature in the bottom 10 funds in terms of outflows. While this could be a feature of the short-term category, it could also reflect that in the current economic climate corporates are needing to draw on their liquidity, or that funds are being redeployed to other higher duration Interest-Bearing categories with more compelling yields on offer.
As of 31 December 2021, Ninety One became the largest CIS manager in South Africa, surpassing Allan Gray in Assets under Management. Allan Gray regained this title as of 31 March 2023, and retains it as of the last quarter-end with AUM of R345bn. Collectively, the five largest CIS managers control just over R1.4 trillion of AUM.
The Allan Gray Balanced Fund is the largest Multi Asset High Equity unit trust in the country, with R175bn AUM. Over the five years to end June 2023, AUM in this fund grew at 2.7% p.a., while Coronation’s Balanced Plus grew at 3.9% p.a. Ninety One’s Opportunity Fund has shown impressive AUM growth of 9.6% p.a., and although the Ninety One Managed Fund is only around half the AUM of the Opportunity Fund, this has shown even stronger growth of 17% p.a. Discovery’s Balanced Fund has grown from AUM of R21bn to R36bn, annualizing to 11.4% growth p.a.
Source: All figures are provided by ASISA, with additional analysis by FNB Wealth & Investments. All AUM calculations are based on assets minus all double counting.
