August 7, 2019

South African Fund Market Summary H1 2019

by Detlef Glow.

The South African fund industry enjoyed estimated net inflows of $4.8 bn in H1 2019. These inflows occurred in a volatile but positive market environment driven by discussions about a possible trade war between the U.S. and China, a possible return of the euro crisis caused by developments in Italy and France, and a general economic slowdown with decreasing earnings at the company level. Nevertheless, since the equity markets showed a rebound over the course of H1 2019, one would expect to see net inflows into mutual funds.

Assets Under Management in the South African Fund Industry

The assets under management in the South African fund industry increased from $168.9 bn to $184.2 bn in 2019 year to date. This increase was driven by the performance of the underlying markets (+$10.5 bn), while net sales contributed inflows of $4.8 bn.

Graph 1: Assets Under Management in the South African Fund Industry (U.S. Dollar Billions)

Fund Market Review South Africa H1 - 2019

Source: Lipper from Refinitiv

Mixed-assets funds ($75.3 bn) were the asset type with the highest assets under management at the end of June 2019, followed by equity funds ($43.5 bn), bond funds ($25.2 bn), money market funds ($23.6 bn), alternative UCITS funds ($14.0 bn), commodity funds ($2.0 bn), and real estate funds ($0.2 bn).

Graph 2: Market Share by Asset Type (June 30, 2019)

Fund Market Review South Africa H1 - 2019

Source: Lipper from Refinitiv

South African Fund Flow Trends H1 2019

Generally speaking, the year 2019 has so far been a tough year, with split results for some asset managers in the South African fund management industry. Nevertheless, the year can be considered as positive as mutual funds (+$4.8 bn) have enjoyed net inflows.

Graph 3: Estimated Net Sales by Asset Type, H1 2019 (U.S. Dollar Billions)

Fund Market Review South Africa H1 - 2019

Source: Lipper from Refinitiv

Fund Flows by Asset Type*

A more detailed view by asset type reveals that not all asset types enjoyed inflows in H1 2019. Bond funds (+$2.5 bn) was the best-selling asset type, followed by money market funds (+$1.4 bn), mixed-assets funds (+$0.8 bn), commodity funds (+$0.1 bn), alternative funds (+$0.1 bn), and real estate funds (+$0.01 bn). Conversely, equity funds (-$0.1 bn) was the only asset type with estimated outflows over the course of the first six months of 2019.

Fund Flows by Sectors*

Bond ZAR (+$2.5 bn) was the best-selling sector overall, followed by Money Market ZAR (+$1.4 bn), Mixed Asset ZAR Conservative (+$0.4 bn), Mixed Asset ZAR Flexible (+$0.3 bn), and Mixed Asset ZAR Balanced (+$0.2 bn).

Graph 4: The 10 Best and Worst Selling Sectors for H1 2019 (U.S. Dollar Billions)

Fund Market Review South Africa H1 - 2019

Source: Lipper from Refinitiv

At the other end of the spectrum, Equity Emerging Markets Global (-$0.2 bn) suffered the highest estimated net outflows overall, bettered by Equity South Africa (-$0.1 bn), Bond Global USD (-$0.1 bn), Mixed-Asset USD Balanced Global (-$0.1 bn), and Mixed Asset USD Flexible Global (-$0.1 bn).

*Please note that Lipper launched an updated Lipper Global Classification Scheme in May 2019, which caused some shifts with regard to the assets under management and the estimated net flows within the single asset types and/or sectors. Please visit our website, to learn more about the new Lipper Global Classifications.

Fund Flows by Promoters

Nedgroup Investments, with net sales of $1.0 bn, was the best-selling fund promoter for H1 2019 overall, well ahead of Stanlib (+$0.6 bn), Investec (+$0.4 bn), Allan Gray (+$0.4 bn), and Satrix Managers (Pty) (+$0.3 bn).

Graph 5: Ten Best Selling Promoters, H1 2019 (U.S. Dollar Billions)

Fund Market Review South Africa H1 - 2019

Source: Lipper from Refinitiv

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