Coronation Fund Managers Ltd., the South African bourse’s second-best performer this year, said it expects a more difficult investment environment in future years after boosting assets under management by 45 percent.
“We continue to caution investors that the absolute levels of returns by capital markets are unsustainable,” the Cape Town-based asset manager said in a statement to the Johannesburg stock exchange today. “We expect lower returns in the future.”
Managed assets increased to 492 billion rand ($47 billion) in the year through September from 339 billion rand a year earlier as the company attracted net inflows of 54 billion rand, Coronation said. Profit more than doubled to 1.46 billion rand.
The S&P 500 has rallied about 24 percent in 2013, heading for the best annual gain in a decade. The gauge is trading at 16 times projected earnings, more than the five-year average of 14 times earnings, according to data compiled by Bloomberg. Investors including BlackRock Inc. Chief Executive Officer Laurence D. Fink, whose company is the world’s largest money manager with $4.1 trillion in assets, say U.S. Federal Reserve policy may be stoking “bubble-like” market conditions.
Fed Chairman Ben Bernanke earlier this year hinted at a possible reduction in quantitative easing, prompting outflows from emerging markets. The Fed stayed its hand and is now seen paring the monthly pace of bond buying to $70 billion at its March meeting, from a current level of $85 million, a Bloomberg News survey of 32 economists show.
“The years ahead will undoubtedly present a more difficult investment environment,” Coronation said.
Coronation shares fell 0.1 percent to 82.50 rand by the close of trading in Johannesburg. The stock has rallied 108 percent this year, making it the best performer after EOH Holdings Ltd. on the 165-member FTSE/JSE Africa All Share Index, which has gained 16 percent.