Functional responses of the herbaceous plant community explain ecohydrological impacts of savanna shrub encroachment

•Water stress for the herbaceous community was lowest on intermediate shrub encroached savanna sites.•Intermediate levels of shrub cover are likely to be most sensitive to further encroachment.•Competitive exclusion via active resource acquisition was minor for community assembly in a shrub encroaching savanna.•Passive stress avoidance via resource conservation and stress tolerance are the dominant community assembly processes.