According to statistics from the Association for Savings and Investment South Africa (ASISA), the Collective Investment Schemes industry attracted total inflows of R4bn in the second quarter of the year. However the bulk of these inflows consisted of income reinvested, without which the industry would have seen outflows of R5bn.
Despite this, Leon Campher, chief executive officer of ASISA, remained positive on the second quarter’s results and said it must be seen in the context of the total net inflows of R66bn recorded in the 12 months to the end of June.
Campher said a reason for some of the outflows is likely to be the impending closure, by the 2011 Draft Taxation Laws Amendment Bills, of a tax loophole which currently benefits Dividend Income Funds, causing investors to exit these funds. He said, as a result, R1.3bn net outflows were recorded in this category of funds in the second quarter.
Another category with significant outflows was domestic Money Market funds which posted outflows for the quarter of R9.9bn.
However, Campher said he is not concerned. “A closer look at industry statistics has shown that the withdrawals were made by a few corporate investors, mainly from Corporate Money Market Funds,” he said.
“This is not necessarily a bad thing since these corporates may well have ring fenced this money for development projects or other investment opportunities.”
ASISA said, at the end of June 2011, the industry’s total assets under management stood at R956bn, compared to the R949bn at the end of March this year. In addition, following a decline in the number of funds on offer to 934 in the first quarter of this year, ASISA said a number of new fund registrations brought the number back up to 943 by the end of June.
