Insights

• The CIS industry in South Africa has experienced strong growth over the past three decades.  
• The available product range has expanded significantly over this period with many providers offering funds across different asset classes, geographies, and investment strategies (e.g., active, rules-based, etc)
• Multi-asset, international and income funds have experienced the strongest growth within the industry.

The evolution of the CIS industry over the past 30 years

Over the past 33 years, Collective Investment Schemes (CIS) have experienced a Compounded Annual Growth Rate (CAGR) of over 20%! In 1990 the industry assets were just under R8 billion and were dominated by South African equity funds. Today the industry has over R3.5 trillion in assets and covers a range of local and international funds across multiple asset classes. 

The were several tailwinds that boosted this growth, especially during the 90’s and 00’s. The shift from Defined Benefit (DB) Pension schemes towards Defined Contribution (DC) Pension schemes, created an environment for competition among existing and new independent asset management firms. The rise of retail investment platforms servicing financial advisors that increasingly focused on investments rather than just traditional risk products, also assisted in more assets going into CIS funds. 

Most CIS assets are in funds that hold equity – these include pure equity, multi-asset and international funds. This sector makes up nearly 70% of the CIS industry and has grown by just under 20% since 1990. The Bond and Income funds sector has seen the highest growth over this period, growing by nearly 26% per annum. Money market funds have also seen growth of over 20% per annual since the late 90’s.