Strong 2025 masks weak long-term retirement returns

Long-term investment returns for South African retirement funds remain under pressure, despite strong performance in 2025, according to the latest survey by Alexforbes.

The group says returns over a 10-year period have been “quite pedestrian”, reflecting a long period of weaker growth since the global financial crisis.

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Alexforbes announced its December 2025 Manager Watch Survey results on retirement fund investment managers on Wednesday during a media briefing.

The survey covers 94 asset managers and 875 strategies, reflecting continued growth in the industry.

Performance highlights

The South African equity sector was the best-performing asset class in 2025, with the FTSE/JSE All Share Index returning 42.4%, up from 13.4% in 2024, supported by stronger gold and PGM prices.

Alexforbes points out, however, that over the longer term, median returns have trended lower.

Janina Slawski, executive of investment consulting at Alexforbes, says: “If you look at the rolling 10-year returns … it has been challenging when you’ve had South African equities underperforming even emerging market equities and emerging markets generally underperforming developed markets.”

She says returns over the past decade have been “quite pedestrian”.

“I think we haven’t had a normality in the market since the global financial crisis, which is now a very extended period.”

Against this backdrop, 2025 delivered an unusually strong year for investors, driven largely by domestic equities.

All managers in Alexforbes’s South African Best Investment View (BIV) category delivered positive returns, with 10 out of 19 managers outperforming the median return of 31.9%.

However, the survey and presentation show a big gap between the best- and worst-performing portfolios, especially in equities, highlighting how important it is to pick the right shares in a concentrated local market.

Global portfolios lagged domestic returns, with a median of 21.1%, partly reflecting a stronger rand over the period.

Volatility once again 

The improved market conditions seen late in 2025 have already begun to reverse, with the outlook shifting sharply in early 2026.

“As we know, 2026 has proved extremely challenging year-to-date with events unfolding in terms of the Iran war and negative views in terms of what could happen to the oil prices with supply shocks,” Slawski says.

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The geopolitical developments have reintroduced uncertainty into global markets, raising questions about the continuation of recent gains.

Ninety One retains top spot

On the industry side, Ninety One remains the largest asset manager in South Africa by assets under management, according to Alexforbes’s June 2025 survey data. Stanlib came in second, while Coronation rose from fourth place to third.

The survey also tracks whether assets are becoming more evenly spread across asset managers.

While there has been some expectation of a shift away from the largest players, asset allocations to the top 10 managers have been mostly stable, rising slightly from June 2023 to June 2024 and then remaining largely flat into June 2025.

Alexforbes notes that there is a growing client interest in emerging black-owned managers, as well as firms that are more nimble in their investment approach.

These managers are often better positioned to move between mid- and small-cap stocks.

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