ColonialFirst State(CFS) has suffered a series of large outflows in key retail funds, totalling almost $750 million in the 12 months to March 2003, despite rapid funds growth in its platform.
According toAssirtfigures for the period, the group’s flagship managed fund, the CFS Imputation Fund had outflows of $495 million while the small cap Future Leaders Fund sustained outflows of $221 million.
Other funds also suffering significant outflows include the Diversified Fund at $97.9 million and Bricks and Mortar Fund at $77.8 million.
This has come at a time when the group’s low cost platform FirstChoice has shown record growth which has masked the level of outflows in the group’s retail funds.
However, Colonial has offset some of the movement from its retail funds with those offered through FirstChoice picking up some of the slack. FirstChoice’s Imputation Fund attracted $22 million over the 12 month period while the Income Fund attracted $46.24 million and the Growth, Conservative and Moderate Blended funds attracted $38.95 million, $44.05 million and $66.45 million respectively.
These inflows also provide Colonial with a further boost as the underlying managers in the blended funds, which are all in-house fund-of-funds, offering greater control and efficiency over the investments.
This retention of funds inside the group has been confirmed as part of ongoing research carried out byBrillient, which found that about half the inflows into Colonial are retained and managed by the group, according to managing director Graham Rich.
Colonial head of investments market research Hans Kunnen say the drop in retail funds was to be expected given the nature of investment markets.
“However, this has been heavily outweighed by the flow of external funds into FirstChoice, which we have pitched as a retail product and from a business point of view it makes sense for us to be pleased with whatever way the funds come in,” Kunnen says.
The FirstChoice platform has been one of the industry’s big success stories after it began from a standing start with $300 million.
In its first three months, it reached figures of $850 million and after six months was at $1.4 billion. It passed the $2 billion threshold in February this year, less than nine months after inception. In June it passed $3 billion and last week broke the $4 billion barrier.
