Sygnia founder Magda Wierzycka. Picture: GALLO IMAGES/RAPPORT/EON RAATH
Sygnia founder Magda Wierzycka. Picture: GALLO IMAGES/RAPPORT/EON RAATH

Specialised financial services group Sygnia, which was founded by Magda Wierzycka, has warned the next few months could be tough on the investment industry, as corporate failures and job losses gain pace due to the Covid-19 pandemic.

Distressed companies are reducing or suspending contributions to retirement funds, while SA investors are dipping into savings, and looking to move funds offshore, the group said.

The group’s performance in the six months to end-March exceeded management expectations, however, with Sygnia saying given its low-cost focus it had avoided the fee reduction pressure seen recently in the industry.

“Our focus on passive investing, low management fees, product innovation and technology-driven solutions has led to an overall growth in assets and investors,” the group said.

Profit after tax more than doubled to R91.3m, with the group increasing its interim dividend 60% to 40c per share.

Sygnia runs equity funds, financial administration services, foreign exchange trading, savings products and umbrella funds, which are made up of multiple funds.

The group said on Wednesday its low-cost retail savings and investment products continue to attract investors, with retail assets under management growing to R33.9bn at the end of March, from R28bn in the year-earlier period.

“Sygnia’s cost-effective digital marketing campaign has started to bear fruit, and awareness of our low fees and top performance is growing among both independent financial advisers and direct clients.”

From an investment perspective, the Covid-19 crisis has already dwarfed the 2008 financial crisis in its magnitude, human suffering and global reach, the group said. Sygnia said it planned to continue its offshore expansion, intending to launch UK-registered Sygnia managed unit trusts.

gernetzkyk@businesslive.co.za