Follow the money, and it tells a story the headline asset figures don’t. Rules-based or indexed, balanced funds still account for only about a 10th of assets in South Africa’s multi-asset high equity segment, according to our analysis of industry assets under management data. Yet this cohort is attracting a far larger share of new money, drawing about 23% of category flows over the past year and 53% over five years.
That shift is hard to ignore in a category that has become the mainstay in local discretionary and retirement savings.
Active managers still hold the lion’s share of the assets here. However, flows are where you see behaviour change first. Money moving today is a signal of where conviction is heading, and right now a disproportionate share of it is going to systematic, lower-cost strategies.
Looking through the promise
The shift comes down to investors becoming more discerning. The promise of active management in a balanced fund is appealing. You have the most degrees of freedom to add value. Here, you can pick securities within each asset class, and you can tilt between asset classes through tactical calls. The pitch is that a manager will navigate changing markets on your behalf, adding value through increased performance to compensate for the higher fee. However, what more investors are doing is looking through that promise to what has actually been delivered.
On S&P Dow Jones Indices’ mid-year 2025 SPIVA South Africa scorecard, the cross-category average showed that 75% of active funds underperformed over the past 10 years.
The explanation for this shift is structural, not cyclical. Most of your long-term return is determined by your strategic asset allocation. Get that right, capture it cost-effectively, and you’ve done the hard work. A decade ago, that was a theoretical argument. Now there’s actual evidence, and investors can see it for themselves.
Transparency before cost
Lower fees are the obvious draw, but we believe there’s more to this shift. Investing works in reverse. With a car or a meal, paying more usually means getting more. With investing, a higher fee raises the hurdle a manager must clear before the investor is better off. The burden of proof rises with the fee.
So, the bigger story is transparency. For example, at Satrix, we tell clients what our strategic asset allocation will be before we implement it, which is rare in this industry, where positioning is usually disclosed after the fact. Investors know exactly what they own and why. That lowers the governance burden on advisers and trustees, and it facilitates greater confidence when allocating.
Consistency that compounds
The persistent worry about indexing is that tracking the market means settling for the average. That’s a misinterpretation of how the maths plays out over time. Think of a consistent tennis champion like Roger Federer. On any single point, it might be a coin toss whether he wins. But he won most of his matches because he was never on a long losing streak.
A representative index-based fund is the same. It’s rarely at the bottom, so it never has to make up lost ground. Add a cost advantage compounding quietly underneath, and that consistency carries you towards the top over the medium to long term.
The local data reflects this. According to the May 2026 Corion Report, over the year to end-April 2026, the Satrix Balanced Index Fund drew the second-highest inflows of any fund in the multi-asset high equity category, and according to Morningstar data it attracted the fourth-most flows over the past five years.
A long-term game
Our message for investors is, therefore, a reminder about time. Volatility is a feature of these assets, not a bug. It’s part of what drives the long-term risk premium. Most people, especially those saving for retirement, have time on their side. The job is to take that well-rewarded risk, stay the course, and let compounding do the work.
The flows suggest a growing number of South Africans have decided to do exactly that.
Kingsley Williams is the chief investment officer at Satrix.
Disclaimer
Satrix Investments (Pty) Ltd is an authorised Financial Service Provider (FSP) in terms of the Financial Advisory and Intermediary Services Act, 2002 (FSP no 43670). Satrix Managers (RF) (Pty) Ltd (Satrix) is an authorised Financial Service Provider (FSP no 15658) and a registered and approved Manager in Collective Investment Schemes in Securities. Collective investment schemes are generally medium- to long-term investments. With Unit Trusts and ETFs, the investor essentially owns a “proportionate share” (in proportion to the participatory interest held in the fund) of the underlying investments held by the fund. With Unit Trusts, the investor holds participatory units issued by the fund while in the case of an ETF, the participatory interest, while issued by the fund, comprises a listed security traded on the stock exchange.
ETFs are index tracking funds, registered as a Collective Investment and can be traded by any stockbroker on the stock exchange or via Investment Plans and online trading platforms. ETFs may incur additional costs due to being listed on the JSE. Past performance is not necessarily a guide to future performance, and the value of investments / units may go up or down. A schedule of fees and charges, and maximum commissions are available on the Minimum Disclosure Document or upon request from the Manager. Collective investments are traded at ruling prices and can engage in borrowing and scrip lending. A feeder fund is a portfolio that invests in a single portfolio of a collective investment scheme, which levies its own charges, and which could result in a higher fee structure for the feeder fund. International investments or investments in foreign securities could be accompanied by additional risks such as potential constraints on liquidity and repatriation of funds, macroeconomic risk, political risk, foreign exchange risk, tax risk, settlement risk as well as potential limitations on the availability of market information. The manager has the right to close the portfolio to new investors in order to manage it more efficiently in accordance with its mandate.
Visit www.satrix.co.za for more information.
