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Personal finance

Multi-Asset Retirement Funds Show Marginal Improvement

Strategic Insights

— 1 min read

Over five years to the end of 2024, multi-asset retirement funds with an offshore component fared only marginally better than funds invested wholly in South Africa. This trend is significant, as it shows that despite a shift towards offshore investments, the domestic market has provided solid returns. The Alexforbes Manager Watch Survey, which tracks trends in the retirement fund industry, reveals that fund composition and performance are critical factors in this narrative.

Key Takeaways:

  • By the end of 2024, 39 out of 47 managers in the Global Best Investment View category held more than 30% of their portfolios in global assets, with 10 exceeding the 40% mark.
  • The average international exposure of asset managers in the survey increased to 35.2% in December 2024, compared to 34.2% the previous year, highlighting an ongoing trend of increasing global allocations.
  • Multi-managers have significantly gained ground on single managers over the past five years, with multi-managers managing 29 cents for every R1 managed by single managers in 2024, up from 15 cents in 2019.
  • Broad-based black economic empowerment (B-BBEE) remains a strong theme in the South African investment industry, with 52 of the 79 asset managers surveyed achieving level-1 B-BBEE status in 2024.
  • Investing with attention to environmental, social, and governance (ESG) factors continues to gain traction among local asset managers, with the number of signatories to the Code for Responsible Investing in South Africa growing by 32% to 74 in 2024.

Statistics:

  • The average international exposure of asset managers in the survey increased to 35.2% in December 2024, compared to 34.2% the previous year.
  • By the end of 2024, 39 out of 47 managers in the Global Best Investment View category held more than 30% of their portfolios in global assets, with 10 exceeding the 40% mark.
  • Multi-managers managed 29 cents for every R1 managed by single managers in 2024, up from 15 cents in 2019.
  • The number of signatories to the Code for Responsible Investing in South Africa grew by 32% to 74 in 2024.
  • The number of asset managers signed up to the UN's Principles for Responsible Investment rose by 49% over the same period, reaching 64.

Sources:

  • Alexforbes Manager Watch Survey of retirement fund investment managers
  • Pension Funds Act and Regulation 28
  • Code for Responsible Investing in South Africa
  • UN's Principles for Responsible Investment
  • Hesse, former editor of Personal Finance

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