Coronation Fund Managers navigates South Africa's volatile savings landscape

The South African savings industry continued its long-term trend of contraction in 2025 as consumers remained under pressure and unemployment continued to rise, while the Two-pot Retirement System added to the structural headwinds.

This was according to the chairman of one of the largest private sector asset management firms, Saks Ntombela, and the CEO, Anton Pillay, who were commenting at the release of the 52% black-owned Coronation Fund Managers’ annual financial results for the year to September 30.

They reported a 5% outflow from their average funds under management (AUM) through the 2025 financial year, a figure that had moderated from the previous year. “As a major player in the South African savings market, we remain exposed to industry trends, and we do not expect to see rapid industry improvements in the foreseeable future,” they stated.

Commenting on market conditions in the year, they noted that the protracted 2025 National Budget approval process aggravated tensions in the still young Government of National Unity, elevating volatility. Encouragingly, the tensions were ultimately resolved in a manner that could strengthen the new political framework.

Despite this challenging backdrop, their clients benefited from a combination of outperformance in strong markets across much of their fund range and "astute asset allocation decisions within their multi-asset strategies," the two executives said.

The year was also characterised by immense uncertainty in global capital markets following the inauguration of the new administration in the US in January 2025.

“The significant shifts in geopolitical alignment and the threat of major trade tariffs added exceptional volatility over the past 12 months. In addition, the rapid development and adoption of artificial intelligence applications have the potential to disrupt many existing industries and create new growth industries, amplifying the uncertainty in equity markets,” they said.

They said the company's investment in a substantial global capability over the past 15 years across a spectrum of key asset classes and geographies had produced meaningful results, with the manager’s global funds achieving strong outperformance during the period.

“Our global expertise is important for the following reasons: Our domestic funds have benefited immensely, capitalising on many of the opportunities we identified offshore. This capability has become extremely important since Regulation 28 increased the offshore allowance for retirement funds to 45%. For this reason, South African clients increasingly require a global skill set in the managers they select to manage multi-asset class mandates,” they explained.

“Now that we have an established track record across our global fund range, our focus will include further investment in and expansion of our client-facing offshore franchise,” they added.

Coronation’s fund management earnings per share increased by 12% to 453.2 cents a share. Dividends increased by 20% to 343 cents a share. Total AUM increased by 14% to R761 billion (30 September 2024: R667 billion), due to outperformance across the fund range.

Operating expenses increased by 4% year-on-year as day-to-day expenditure and investment in bolstering capabilities were tightly balanced. Revenue from fund management was up 10% due to management fee growth (11%) and performance fee growth (3%).

Coronation’s share price was up 0.47% to R49.16 Tuesday morning after the release of the financial results, a price that had risen 24.3% over 12 months.

BUSINESS REPORT