Retail investors invested two billion rand more in unit trusts during the second quarter, which indicates that the average investor's obsession with retail property as an investment is starting to wane in line with slowing to stagnant residential property growth.

That's according to Investec Asset Management director Jeremy Gardiner.

He says that in line with a similar trend during the first quarter, investors withdrew further from domestic equity funds into asset allocation funds.

In the first quarter, this was attributed to prudence; in the second, this would have been motivated more by fear as a result of turbulent markets.

"The current investment environment remains more conducive to equities than to cash or bonds. Asset allocation funds allow investors to maintain an exposure to equities, with the amount thereof dependent on how much risk the individual can stomach.

"In addition, the statistics also highlight a growing trend during turbulent times that investors prefer to leave the asset allocation decisions to the professional money managers. Given the volatile environment, it is also not surprising that the low equity asset allocation funds received the heaviest flows.

"Finally, it is encouraging to see close to one billion rand flowing into worldwide and foreign funds, suggesting that investors are starting to diversify offshore again," Gardiner adds.

I-Net Bridge
 
Publisher: I-Net Bridge
Source: I-Net Bridge