Jul 16 2010 11:35 Marc Ashton
Johannesburg - Unit trusts are again gaining popularity after a tough 2009.
This is according to chief operating officer Anthony Katakuzinos at asset management firm Stanlib, who said the group saw "reasonable" inflows over the last few months.
"We have definitely seen an improvement since last year, in which we experienced a slowdown in the form of outflows," he said. "But over the past six months or so we have seen a marked increase in flows into unit trusts to the value of about R1bn."
On Thursday, wealth management firm Old Mutual [JSE:OML] released the results of its Savings Monitor which tracks the savings habits of South Africans for the first six months of 2010. The country is still battling to improve its savings regime, while there had been little or no growth in unit trust investments.
However, the popularity of stokvels, funeral and education policies have ticked up.
"Stokvels and informal savings clubs have a long-standing tradition in South Africa, and have historically been used by their members to save for specific purposes or events," said Katakuzinos.
No proper retirement planning
"We have seen consumer spending decrease substantially. Under such conditions you tend to see a cash build-up in stokvel-type investments, whether bank deposits or similar types of investments."
Another conclusion from the Savings Monitor results is that South Africans do not have the financial awareness to make informed decisions about adequate provision for retirement.
Rian le Roux, chief economist at Old Mutual Investment Group South Africa, warned: "South African households save way too little. Most assume that their pension funds will provide sufficient retirement capital, but few both ever bother to check whether this is true."
The poor savings rate in South Africa also worries the Association for Savings and Investment South Africa (Asisa), which has just announced the formation of a high-level think tank.
Asisa CEO Leon Campher said: "By not saving today, South Africans are compromising their ability to buy tomorrow.
"Unfortunately, today's spending usually involves excess splurging on cars, clothing and other luxury items, which reduces the ability to later fund something meaningful, like a child's education or to provide for a comfortable retirement."
From Fin24.com published on Jul 16 2010 11:35
