Analysis: Financial Services Funds — Why property is so popular
AT ONE time the sector funds were popular with certain financial advisers who believed they could add value to their clients by giving a direct stake in industrials, resources or financials at the right time.Now these funds have barely 1% of unit trust assets even when their totals are combined. Financial funds have just R3.9bn under management, split between six funds and a Satrix passive fund. In fact, the only popular sector funds are in property, with R70bn under management.Property, however, is an asset class in its own right, which is not true of the three equity sector funds. And investors buy property for yield as an alternative to bonds. Financial funds are entitled to invest in property shares as they make up 28% of the financial index. But none invests more than 8% of its portfolio in the sector. It is simple: they have a handful of key clients, mostly multimanagers or designated investment managers (the likes of Analytics and PortfolioMetrix) who want an exposure to bank...
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