S.A's top investment sectors - CNBC Africa

S.A's top investment sectors

Southern Africa

by Trust Matsilele 0

2015 was a good year for hedge funds and CIS industry in S.Africa. PHOTO: Flickr

South Africa saw a 12 per cent jump in investment flows into the country to 1.9 trillion rand in 2015 from 1.7 trillion rand in 2014.

The figures demonstrate a healthy increase of around 200 billion rand. The local Collective Industry Scheme (CIS) also attracted net inflows of 101 billion rand in 2015.

According to Leon Campher, chief executive of Association for Savings and Investment South Africa (ASISA), this was achieved in a tough environment marked by economic turmoil, political uncertainty and local and international market volatility. 

He also added that, SA multi-asset portfolios  became the investment vehicle of choice for the majority of investors and their financial advisers over the past five years.

“While at the end of December 2010 almost half of all assets under management were held in SA interest bearing portfolios, we now have 51 per cent of assets invested in multi-asset portfolios.” 

Campher says that when comparing the local CIS statistics to global figures, it becomes apparent that South African investors have a very different risk appetite to their international counterparts.

“Investor preference for Multi Asset portfolios, for example, appears to be unique to South Africa,” he notes.  

He also added that, while the majority of South African investors remain wary of equity exposure, portfolios with some general equity exposure have on average delivered annual returns of nine percent or more per year (net of fees) over five years, 10 years and 20 years to the end of December 2015.

 “This proves that it is time in the market that delivers solid returns over the long-term and not timing the market. The only way to beat volatility is with an appropriately diversified portfolio, provided you give it a chance over the longer term to help you achieve your investment goals."

The country's hedge fund industry also registered positive result in 2015.

Robert Foster, convenor of the ASISA Hedge Funds Standing Committee, says the industry is expected to experience another growth spurt now that investors have access to regulated products for the first time. 

He added that the sector was doing well partly because hedge funds were being managed by highly skilled people.

According to Foster, the ten largest hedge fund managers in South Africa manage 71 per cent of the hedge fund industry’s total assets under management.

“This means that the bulk of hedge fund assets are invested in sizeable portfolios managed by well-established hedge fund asset managers with a consistent track record of success,” explains Foster.