Master fund market grows 21.1 per cent

The total master fund market grew by 21.1 per cent in 2009 and stood at $410.3 billion at 31 December, according to Plan for Life research.

The research revealed that the master fund market, comprised of platforms, wraps and master trusts, jumped $12.4 billion in the December 2009 quarter. But inflows were down to $87.4 billion from the previous year’s results of $99.2 billion, and outflows were down to $71.2 billion from $83.3 billion.

Looking at each segment of the market, the research found that BT Financial ($29.3 billion), Macquarie ($23.4 billion) and National Australia Bank/MLC ($10.4 billion) are the leading players in the wrap market. Plan for Life defined wrap products as master funds through which investors can invest in direct shares, and which generally charge one consolidated fee. Wraps comprise 28.4 per cent of the total market with $116.6 billion in funds under management (FUM).

Inflows to wraps were $33.9 billion and comprised 38.8 per cent of total inflows, while outflows gave wraps 36 per cent of Net Fund Flows with $5.8 billion.

National Australia Bank/MLC ($64.4 billion) and Commonwealth Bank/Colonial ($43.2 billion) are at the top of the five groups that hold over $20 billion in platform FUM. Platform products, defined as master funds with multiple divisions such as super, allocated pensions and investments, comprise 56.8 per cent of the master fund market, with $232.9 billion in FUM. This represents growth of 23.2 per cent over the year.

Inflows of $42.2 billion made up 48.3 per cent of all inflows, and outflows were $33.8 billion.

Master trusts products, comprising the remaining group of master fund products, saw a decline in market share, down to 14.8 per cent in the December quarter at $60.7 billion in FUM. This segment only attracted 12.9 per cent of total inflows of $11.3 billion in 2009.