Investment market fund flows weaken
The managed funds industry finished off 2005 with weaker investment flows in the December quarter, according to the latest Standard & Poor’s (S&P) Market Share Preliminary Findings report.
The increase in total investment management (TIM) for the final quarter of 2005 was $22.7 billion, down from the previous quarter that produced a $37.5 billion increase.
The main driver of the weaker flows was the Australian market, which provided significantly lower returns when compared to the September quarter. The effect of the Australian market was however slightly neutralised by the strong performance from both the international markets and the property sector.
“The overall message for the managed funds industry is one of consistent, though weakening flows within an uncertain investment market,” S&P director of fund data Julie Orr said.
“Strong returns from the international and property sector have balanced a lacklustre Australian market performance for the quarter, giving investment managers some breathing space,” she added.
Platforms continued to be the dominant players in the market with wholesale flows from the top 10 platforms achieving stronger flows than the remainder of the market.
Of the top 10 performing managers AXA Group headed the list with an increase in TIM of $4.3 billion or 9.5 per cent. Its predicament though was a reflection of the general trend as this result was well below the 17 per cent increase that was achieved over the September quarter.
The increase in retail platform business also diminished in the final quarter of 2005 finishing at $13.2 billion, again well short of the $20.5 billion generated during the prior three-month period.
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