Statistics from the Association for Savings and Investment South Africa (Asisa) on collective investment scheme inflows and outflows highlight how short-sighted changes to your investments can backfire, leaving you poorer than those who take a more hands-off approach.
As I reported in July (How your investments fared to the end of June, Saturday, July 28), the financial markets rebounded in the second quarter after a long period of lacklustre performance.
But during this period, more money flowed out of pure equity funds and high-equity balanced funds than into them.
This means investors were nervous understandably so, in the weeks before our general election on May 29 and many retreated to the safety of cash, missing out on the turnaround in the local equity market. The FTSE/JSE All Share Index was up 8.2% for the quarter, which pushed up its 12-month performance to 9.1%.
Asisa reports that assets under management in local collective schemes (unit trusts and exchange traded funds) grew 2% to R3.64 trillion during the second quarter, despite net outflows of R30 billion. (This excludes R24 billion ploughed back into funds by investors who chose to reinvest dividends and interest, reducing net outflows to R6 billion.)
