South African collective investment schemes (CIS) recorded the strongest net quarterly inflows in several years in the first three months of 2025 despite the turbulent start to the year for investors.
Local CIS management companies recorded total net inflows of R104.14 billion over the 12 months to the end of March 2025, with the bulk of these inflows contributed by existing investors who reinvested income declarations (dividends and interest), accord to CIS industry statistics for the quarter and the year to the end of March, released today by the Association for Savings and Investment South Africa (ASISA).
Although only R17bn of the annual net inflows represented new money, it is noteworthy that R12bn in new investments was received during the first three months of the year, says Sunette Mulder, senior policy adviser at ASISA.
Participating CIS management companies grew their assets under management to R3.93 trillion. This represents a modest 1.4% increase from the R3.87 trillion under management at the end of December 2024, but a healthy 10% increase over the 12 months from the R3.57 trillion under management at the end of March 2024.
Mulder says a series of local and international upheavals led to a rollercoaster quarter for the South African stock market.
The sudden withdrawal of the Budget in February signalled discord within the Government of National Unity, leading to a sharp decline in the JSE All Share Index (ALSI) and a weakening of the rand. Although both recovered quickly, the trade tariff shake-up announced by the United States in March triggered severe stock market volatility worldwide, and South African financial markets were not spared.
Despite this volatility, the ALSI achieved a 5.9% gain in the first quarter, primarily driven by strong commodity performance, resulting in a total return of 22.9% for the 12 months to the end of March. The ALSI outperformed (in rand terms) the S&P 500 both in the first quarter and over the 12-month period, and the FTSE 100 over the 12-month period, according to Mulder.
“Considering the extreme market volatility, geopolitical strains and local political uncertainty at the start of this year, we were positively surprised by the most substantial quarterly inflow of new money since the third quarter of 2022. Combined with reinvestments, total net inflows for the quarter amounted to R48bn, the highest since 2020.”
Investor trends
Just under half of assets (49.5%) were invested in South African multi-asset portfolios at the end of March. SA interest-bearing portfolios held 30.6% of assets, 18.6% of assets were in SA equity portfolios, and 1.3% were in SA real estate portfolios.
SA interest-bearing portfolios attracted the highest net inflows, both for the quarter (R29bn) and the year (R52bn) to the end of March, Mulder says.
SA multi-asset portfolios had quarterly net inflows of R18bn and annual net inflows of R45bn. SA equities recorded net inflows of R3bn for the quarter, but net outflows of R13bn for the year.
South African investors had a choice of 1 883 local CIS portfolios at the end of March.
Locally registered foreign portfolios held AUM of R974bn at the end of March, a slight drop from the R975bn at the end of December 2024. These portfolios recorded net inflows of R5.08bn for the quarter and R8.86bn for the year.
There are 756 foreign currency-denominated portfolios on sale in South Africa.
