Drops in FUM in June quarter

Total funds under management (FUM) in the retail and wholesale markets decreased by 3.86 per cent in the June quarter, but had a positive performance over the financial year, according to the latest figures released by the research house Dexx&R.

The research, however, showed retail investment experienced the largest drop out of all retail market segments, falling by 7.6 per cent over the quarter and also recording a decrease of 1.3 per cent over the year.

Dexx&R managing director, Mark Kachor, said the drop occurred despite the positive investment performance during the last financial year, reflecting a lack of inflows in this market.

“People still haven’t returned back to managed funds; investment in managed funds generally, even in superannuation, seems to be pretty closely linked to returns,” said Kachor.

“During periods when the share markets are rising, the inflows are much stronger than during periods of downturn,” he added.

All top ten companies in retail investment also recorded falls in terms of FUM, including market leaders Macquarie (-3.3 per cent), BT Financial Group (-11.1per cent) and Colonial First State (-9.4 per cent).

Other market segments, such as retirement incomes, employer and personal superannuation, generally had a positive performance over the year in terms of funds under management, despite recording falls in the June quarter.

Kachor believes the market is moving along quite strongly at the moment, expecting a return to the growth pattern for the September quarter.

“The market certainly seems headed towards having quite a positive quarter in terms of returns, because a substantial portion of the money in each of the sectors is existing funds under management,” he said.