It can’t be easy for fund managers when the market doesn’t behave in the way that it does in textbooks for chartered financial analysts, better known as CFAs. After five years — even including an abnormally strong past year on the JSE — money market unit trusts have thumped both general equity and balanced funds. Money market funds gave a 6.6% average annual return compared with 5.5% from general equity funds and 6.3% from high equity balanced funds. This is according to the third-quarter report just released by savings and investment body Asisa.

That experience is unlikely to be an indication of the next five years. And it’s worth noting that money market funds — even before tax — have failed to beat inflation this year, with a modest 3.9% return. The Reserve Bank has already increased rates by 0.25% and is likely to become more hawkish as inflation creeps in...

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