CFO Murad Sirkot says Sygnia sees opportunity in the new normal

Sygnia’s low-cost passive investment strategy pays off with double digit growth despite Covid-19.

Asset manager Sygnia has delivered strong results for the half-year to end March 2021, with assets under management up 27.8 percent to R278.3 billion, revenue rising 13.8 percent to R350.5 million and profit after tax up 16 percent to R105.8 million.

Commenting on the results, CFO Murad Sirkot said, “It is extremely difficult for many businesses to achieve double digit returns, and even more so during a pandemic when a number of companies have gone into business rescue, closed down or made losses. Against that backdrop, we are especially pleased to have delivered value to our shareholders once again, reaching a new milestone for first-half-year results.”

“We reached new milestones in a number of other areas of our business as well: assets under management and administration are at R278.3 billion, the Sygnia Umbrella Retirement Fund is at R10.0 billion [including transfers awaiting regulatory approval], we have over 30,000 retail investors, and the value of our ETFs has reached R26.9 billion,” he added.

“These remarkable results can be attributed to another period of outstanding performance from our investment team and net inflows delivered by our business development team (at a time when some large competitors have reported net outflows), as well as the surge in local and global stock markets.”

According to Murad, Covid-19 has had both positive and negative impacts on the financials.

“More people have focused on the cost of investing and have done some research into investment products, which has contributed to the increase in the number of Sygnia investors. On the negative side, some businesses have downscaled or closed completely, resulting in high levels of retrenchment and, consequently, high levels of retirement fund withdrawals. However, in recent months the level of withdrawals has tapered off and is returning to normal levels,” he said.

As a result, Sygnia is looking at the new normal as an opportunity. On the back of significant growth over the past 12 months, especially in the retail division, Sygnia is also positioning itself for future growth by embarking on a number of technology initiatives for better risk management and efficiencies.

“Covid-19 has made people think more carefully about healthcare and the importance of this industry in all our lives. To this end, we launched a healthcare unit trust fund earlier this year and will be launching a healthcare ETF later this year. Furthermore, in response to demand from the market, we recently launched the Sygnia Itrix S&P Global 1200 ESG ETF and the Sygnia Itrix MSCI Emerging Markets 50 ETF; we will also be launching an Autonomous Technology ETF and a China ETF,” continued Murad.

“While we were disappointed that our submission to launch a bitcoin ETF was declined by the JSE on the grounds that there is no national policy framework for cryptocurrencies, we will keep trying.”