Funds market grows in face of turmoil
Australia’s retail managed funds market has overcome the market turmoil and investor insecurity that followed the September 11 terrorist attacks in the US to record positive growth figures for the December quarter of last year.
The latest report on the managed funds industry from research groupAssirt, released today, shows the size of the retail market increased by 5.7 per cent to $236.4 billion in the three months to December, quelling fears the terrorist strikes would rout the local funds management industry.
The growth, which came mostly on the back of a rebound in equity markets in the latter part of last year, helped the combined National/MLC group increase its share of Australia’s retail managed funds market from 14.1 per cent to 14.4 per cent to retain its number one position ahead of the Commonwealth Bank, AMP and Colonial First State.
Westpac, BT, ANZ, Macquarie, ING and AXA round out the list of top 10 managers of retail funds in the latest survey, with all but BT, which slipped from fourth to sixth, maintaining the position they held in the September quarter 2001.
The overall growth in the total retail market, however, could not mask a noticeable drop in net inflows into the sector.
The fall in net inflows, first witnessed in the September quarter, continued over the December quarter, meaning that yearly net flows fell by almost 2.5 per cent to $17.88 billion for the calendar year 2001.
Colonial First State, aided by the popularity of their mortgage based income products, came from third position at the end of the September quarter to finish top of the inflow tables at the end of December.
Challenger International, with strong inflow into its Howard Mortgage Fund, also did well, receiving the fourth greatest flow of funds in the December quarter after finishing only sixteenth in June.
The Commonwealth on the other hand recorded net outflows of $60 million in the three months to December, a figure believed to be predominately a result of outflows from Colonial Mutual life products.
The December quarter also saw master trusts continue to push their claim as the investment vehicle of choice for retail investors.
The master fund market grew by 4.3 per cent over the quarter to $76.58 billion and by 20 per cent over the full year - compared to 11 per cent for the overall retail industry - proving once again that master trusts continue to capture a growing show of retail investor’s funds.
The positive trend towards master trusts has also been exacerbated by the success of the BT and Macquarie wrap services which, together, accounted for $8 billion of funds under administration at the end of last year, according to Assirt.
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