Why savers are ditching the money market

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SA investors are usually wary of risk, but many are dumping the safety of money market funds and turning to local equities. But does SA’s poor economic growth justify this approach?

SA’s notoriously risk-averse investors appear to have taken a bigger plunge into equity funds than usual as inflation begins to wreak havoc on returns in supposedly safe money-market funds.

According to data from the Association for Savings & Investment SA, R24bn of net flows landed in multi-asset funds in the year to end-March. If you exclude reinvestments the amount is closer to R11.6bn with the chunk of it landing in multi-asset high equity funds. The take-up of equity funds was also not too shabby, with net flows of R6.9bn over the same period...

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