Financial Services Editor
SOUTH African institutional investors withdrew more than R1bn from off shore collective investments in the quarter through March, and also pumped R4bn into rand-denominated retail and institutional funds, Association of Collective Investment (ACI) CEO Di Turpin said yesterday.
This was despite a weakening rand that bolstered foreign-denominated investments, but Turpin said this could be due to a renewed interest in the domestic market.
Offshore retail funds, however, continued to attract investors despite volatile world markets, with net inflows of R459m added to R803m in the December quarter.
Turpin said institutional funds had suffered a capital flight of R1,04bn, of which R443m came from equity funds and R602m from fixed interest. This brought the total net investment for all foreign denominated funds to a negative R586m in the quarter.
Foreign retail equity funds were the preferred investment destination as net inflows from this segment totalled R210m, while asset allocation funds attracted R185m and fixed interest R64m. Turpin said foreign funds’ total assets grew from R107,9bn in the December quarter to R117,9bn at the end of last month as the number of funds swelled to 369. This was largely due to the depreciation of the rand against its major trading currencies.
Foreign-denominated assets had more than doubled in the past five years. These funds are regulated by the Financial Services Board and subject to the same governance as is applied to domestic rand-based funds, she said.
Turpin said collective investments in other countries had succumbed to global financial turmoil, but SA’s domestic collective investments stayed positive, chalking up net new investments of R4bn in the quarter to March.
The latest ACI quarterly statistics showed retail fund flows accounted for R2,8bn, and institutional topped R1bn.
Turpin said there were heavy outflows from equity funds with the domestic equity funds sector down R6,6bn and asset allocation by R1bn. But this was offset by very strong flows into fixed interest funds of R11,4bn.
Money market inflows were R9bn.