Cape Town - Coronation Fund Managers stock rose 5.71 percent to R65.70 on the JSE on Tuesday despite the company reporting a 4 percent decline in profits and assets under management for the six months ended March.
However, the company said it had reopened its SA equity and multi-asset portfolio to institutional clients to counter outflows over the last two years.
It said the cumulative inflows over a number of years were higher than anticipated.
Coronation chief executive Anton Pillay said the firm had continued to attract net inflows from its international strategies from global clients
“Our complete and diversified range of portfolios is now available to clients. In addition, we continue to gain recognition among global asset allocators for our international capabilities that have been built out over the past decade,” Pillay said. “We are proud of the investment returns achieved by our institutional clients who have been invested with us for the long term.”
The company reported its revenue fell 6 percent to R1.9 billion during the period while diluted headline earnings per share decreased by 4 percent to 220.7c.
This was due to its variable cost structure and focused cost control. The group’s assets under management declined 3.8 percent to R576 billion following net outflows of R34.6 billion in the period.
Read also: Coronation profits drop in 'highly volatile' environment
Pillay noted: “As anticipated, following a sustained period of rapid growth in the industry and a disproportionate allocation of industry flows, we have seen net outflows in recent years. There has been a stabilisation in outflows from our funds over the period under review, totalling R4 billion.”
The company’s total net outflows of institutional assets in South Africa was R30 billion as a result of the closure of new institutional investors in its biggest local product categories for past five years and rebalancing of its portfolios.
The firm’s global institutional assets saw inflows of R3 billion for the period. Pillay said the company was now focused on long-term investing that would ultimately deliver compelling returns. “We believe our portfolios are well-positioned to manage the risk that recent political uncertainty has created While near-term volatility and uncertainty may persist, our robust investment approach enables us to make the appropriate decisions for our clients,” Pillay said.