The Association for Savings and Investments of South Africa (Asisa) statistics for the second quarter of 2011 have revealed that investors are starting to show some optimism towards the equities market again.
San-Marie Greeff, chief executive officer at Sanlam Collective Investments, comments, “In the past few years, we have seen large inflows of funds into the money market, driven mainly by the global recession that we have witnessed since the US housing bubble burst in 2008. But what the Asisa results have revealed this past quarter is an increased appetite for equities and asset allocation funds.”
Greeff says the move to equities was due to an increased sense of confidence amongst investors but she warned that investors are likely to continue to remain on the cautious side and will likely remain so for a while.
She added that the attraction of asset allocation funds is the diversification story. Asset allocation funds invest across the equity, bond, money and property markets, with the asset manager deciding how much money to invest in each asset class. “This frees investors from having to time the market and make the tricky decisions of allocating funds to the different asset classes,” she said.
According to Asisa, other stats revealed that the industry attracted net inflows of R4-billion in the second quarter of the year, the bulk of these flows consisted of income reinvested. The second quarter net inflows were the lowest since the end of March 2008 when net inflows were also at the R4-billion level. At the end of June 2011, the industry’s total assets under management stood at R956-billion compared with the R949-billion at the end of March this year. Following a decline in the number of funds on offer to 934 in the first quarter of this year, a number of new fund registrations brought the number back up to 943 by the end of June.