Morningstar moves into market share research

Morningstarand actuarial and research firm, Plan For Life, have combined to generate what they claim is a more complete picture of the retail funds sector.

The two groups have released the first in a series of surveys of the retail managed funds industry that detail both managed fund assets as well as analyse the funds in master funds.

By combining their expertise, the companies claim they can more clearly demonstrate the changing nature of the retail managed funds sector.

The first survey found that over the three months to March 31, 2003, there was a modest decline of 1.6 per cent in total Australian retail managed fund assets, down to $286.14 billion. The major cause of the decline was cited as the unit trusts sector, which saw a 6.2 per cent decline in funds under management.

“The $2.95 billion fall in unit trust net assets accounted for 63 per cent of the overall fall in retail funds under management of $4.6 billion,” the survey says.

“It is important to remember that there is a natural level of redemption from any investment product. If there is no new money flowing into a sector, there will always be a ‘net outflow’, as people use their savings for retirement income to buy a house or take a holiday.”

The survey says the point was equally relevant when comparing traditional retail managed fund products with master funds.

It reported that in each of the three major tax structures — retail superannuation, retirement income, and discretionary investment — the growth of the master fund component exceeded the equivalent retail product component by between four and eight percentage points over the quarter.

“Clearly, therefore, the majority of retail investors are putting their money into master funds and wraps rather than traditional retail managed fund products,” the survey says.