From local to international for South African investors
Market trading in 1980s South Africa was frustrating, without the access to instant data that we take for granted today. So Ernie Alexander set about collating information on market players, from local banks to international institutions, the old-fashioned way; he wrote them out and published his own handbook.
His products have expanded over time to include data on the country’s extensive unit trust industry. Ernie and Profile Group have also moved with the times, becoming key players in the online market incorporating share and fund data, with clients ranging from banks to stockbrokers and independent financial advisers (IFAs).
A chance meeting with a (then) FE representative in the early 2000s has led to an enduring data partnership that continues to grow today.
Ernie’s foresight at the time to digitally record his data for print paid off. He realised it was the data that added value, not the expensive terminal subscriptions that competitors offered. As internet usage expanded, uploading fund information to Profile Group’s FundsData website was comparatively easy versus starting from scratch. The fund data complemented existing local feeds for securities data incorporated from the Johannesburg Stock Exchange.
The international aspect
But there were still gaps to be filled. Local information was welcomed by the investment community, and Profile Group began specialising in tailoring data feeds to suit different stockbroker and adviser platforms. Yet the volatile nature of the South African rand increased demand for overseas investments in other currencies, such as the US dollar and sterling.
“Every single investment house now looks at international and offshore funds. International funds are increasingly important,” says Ernie.
FE fundinfo provided an obvious answer: Profile would feed its local SA fund data directly into the sophisticated FE fundinfo analysis tool, Analytics. This is an award-winning research module from FE Analytics that today offers South African advisers deep fund research into some 100,000 funds and 300,000 share classes worldwide. Acting as a reseller and providing access to this data lets Profile Group enable subscribers to deliver detailed, insightful fund information to their own investors.
Both client demand and the market have changed in the intervening decades. In the early days of FundsData, there were 800 shares listed on the JSE, and around 500 unit trusts on the market. Today, the number of shares has fallen to around 350, but the unit trust market has exploded, with a choice of 2,000 available to financial advisers, and institutional and private investors.
This has made FundsData by far the group’s most popular product, says Ernie. Take-up of data feeds delivering fund data is widespread, as is the ongoing demand for FE fundinfo's Analytics. Our customised solutions plugged directly into fund advisor platforms and internal systems which feature secure logins for individual advisers continues to drive the business.
The future is mobile and customised
The long-term relationship works well for all stakeholders. International fund data is complete and up to date; it is enriched by FE fundinfo staff across the world, including key fund hubs in Luxembourg and Switzerland, as well as in Hong Kong and India. As Profile Group employees do not have to reformat the feeds, or worry about quality, they can focus on their local information sources and dedicate more time to their well-received in-house research.
Ernie and his team have plans to develop their data services further. After 27 years of continual growth in client numbers and revenues, the future looks set to be based on more choice and customisation. Increasingly, the market is moving to mobile and apps. Integrating data feeds into Profile Group’s own app creates a one-stop shop for retail users to monitor all their investments through a wealth barometer.
Increasingly, brokers and banks are also seeking to expand their mobile offerings. Data feeds remain the same for websites and mobiles; nonetheless, ensuring that data is easy to access, read and use will be a priority for clients whose customers are used to the slick interfaces of Apple, Google and other tech giants.
Pension fund investing is also increasingly important to South Africa’s expanding middle class, says Ernie. For many, having cash to invest would have been an unheard-of luxury in the recent past. As such, guidance, understandable data and fund manager communication will likely be in high demand as the market expands, with FE fundinfo’s data being integral to this move forward.