International products boost Coronation’s net inflows

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“Coronation is a cyclical business with a proven investment philosophy and impressive long-term track record. For the year, assets under management increased by 20 per cent to 588 billion rand, supported by total net inflows of 32 billion rand,” the fund management company said.

“In line with our strategy to further grow the global franchise, international products represented 66 per cent or 21 billion rand of this inflow. Total international assets under management grew by 49 per cent to 127 billion rand.”

[DATA CML:Coronation] reported 31 per cent growth in its revenue to 4.7 billion rand for the year ending 30 September 2014 from 3.6 billion rand for the same period in 2013.

“Long-term investment house Coronation Fund Managers delivered a good set of results for the 12 months to 30 September 2014. Strong investment performance was supported by a positive market environment for a large part of the year,” it said.

“However, in the month of September, equity markets sold off as commodity prices plummeted and emerging markets fell sharply. For the financial year, the MSCI World Index returned 12.8 per cent, while the MSCI Emerging Markets Index delivered 4.7 per cent, both in US dollar terms.”

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The company’s profit before income tax increased from 2.7 billion rand in the 2013 year to 2.0 billion rand in 2014.

Basic earnings per share grew 32 per cent to 572 cents in 2014 from 434 cents in 2013 and its final dividend per share increased 17 per cent to 296 cents from 253 cents.

“We have been cautioning investors for some time to expect lower returns from markets. The declines in both the local and global equity markets in September and October of this year have reminded investors that markets do not always follow an upward trajectory,” Coronation said.

“Coronation has benefited from strong markets and excellent performance across our fund range. Earnings are highly geared to market returns and shareholders should not expect earnings to grow every year off the current high base.”

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It added that volatility typically presents an opportunity to long-term investors and that it welcomes recent market movements as an opportunity to add value in its client portfolios.

“We will diligently adhere to our single-minded pursuit of identifying long-term value,” Coronation added.