UNCERTAINTY over when and how the US will end its quantitative easing monetary stimulus programme, combined with subdued economic conditions at home, has led to substantial risk-aversion.
Market skittishness is apparent in fund flows in September with the bulk of money going into low equity and interest-bearing funds.
Local equities have been largely shunned with funds pouring out, particularly from the general equity and high equity categories. However, there is still appetite for global equities, while local industrial stocks are also finding favour.
Ironically, local equity funds put in the strongest performance in September, with financial stocks ahead of the pack with an impressive return of 6.5%. Returns from general equity and industrial funds also topped the 6% mark.
At the bottom end, many of the interest-bearing and low equity funds which attracted the most money have produced the worst performance, although losses on the month were negligible.
The local industrials category is the one sweet spot where investors put money in and were rewarded with a handsome return of 6%.
On a rolling 12-month basis, global general equities are the best performers with a return of more than 42%. That will certainly thrill investors. While some of this return could be attributed to rand weakness, the managers running these global funds deserve credit for their stock selections, given the widely varying performances of equity markets globally.
Those invested locally in multi-asset funds with a high equity or flexible mandate will also be extremely happy with returns of 40% (for high equity) and 36% (flexible funds).