Master trusts continue meteoric rise

Master trusts will continue their meteoric rise over the next five years, growing faster than any other investment vehicle.

According to research by Plan For Life, funds under administration in master trusts will increase by about 133 per cent over the next five years to about $268 billion from the present levels of about $115 billion. This figure works out at growth of about 20 per cent per annum.

Speaking at the recent Master Trust and IDPS Industry Forum, Plan For Life assistant general manager Rael Solomon said allocated pensions would be the fastest growing master trust sector, but super and investment master trusts will not be far behind.

Solomon says there are now more than 270 master trusts operating in Australia under the management of 78 different companies. Master trusts now account for 45 per cent of retail funds under management, with almost double the funds of the unit trust structure.

Master trusts grew 23 per cent last year, being lead by investment master trusts which grew 30 per cent . By far the greatest amount of funds in master trusts lies in superannuation, which accounts for two thirds of funds under administration. Superannuation master trusts grew 22 per cent last year, predominantly from personal super rather than employer super.

The National is the clear market leader, followed by AMP but the Commonwealth is becoming a real force to reckon with after its purchase of Colonial. AMP rules the roost in the critical superannuation master trust market, but is only $200 million from the fast growing National/ MLC combination.