The diversification of asset classes under one portfolio remains favorable for investors, the Association for Savings and Investment South Africa (ASISA) has revealed.
This is despite the economic and political uncertainty crippling the investor confidence in South African markets.
The local Collective Investment Schemes (CIS) industry statistics released for the quarter and year ending March 2016 by ASISA shows that the Multi Asset portfolios remain the investment vehicle of choice, followed by Interest Bearing portfolios and Equity portfolios.
According to the chief executive of ASISA, Leon Campher, over the past five years, the industry witnessed a major shift reversing the CIS investors’ choice.
“Five years ago, 50 percent of assets under management were held in SA Interest Bearing portfolios, with 25 percent in SA Multi Asset portfolios.”
“We now have 51 percent of assets invested in Multi Asset portfolios only 24 percent in SA Interest Bearing portfolios.”
The statistics released today disclose that SA Multi Asset portfolios received net inflows of R72 billion in the 12 months to 31 March 2016, with SA Interest Bearing Money Market portfolios attracting R35 billion of mainly institutional and corporate money, and SA Equity portfolios R3 billion.
According to Campher, this is a reflection of the current conditions and fluctuations in the market.
“A well-diversified portfolio is able to weather extreme market volatility,” he added.