Retail industry inflows drop after tough quarter

Australia’s funds management industry is shrinking, with the total assets under management dropping by almost 6 per cent since June 30, according to the latest Assirt report.

The industry’s total assets under management have shrunk by 5.8 per cent from $659.1 billion at June 2001 to $620.8 billion at September 2001.

Assirt associate director Anthony Serhan says many within the industry will attribute the shrinking nature of the industry to the events of September 11 in America, however this is not the case.

“This fall is not surprising when you consider that both international and Australian equity markets fell by approximately 12 per cent over the same period,” Serhan adds.

“The drop was always on the cards. The incidents of September 11 have not had an impact on the September quarter, as it is too early to record any impact,” he says.

Serhan says the impact of the September 11 terrorist attacks will not be realised until the December quarter results. However, he does say the downturn in the market is a result of a general market slow down.

According to Serhan, investors are more cautious about investing as current investment returns are lower, leaving them thinking about where to invest to receive high returns.

The report also found that quarterly net inflows for the retail industry were down from the June 2001 quarter as well as being lower than the corresponding period last year. It also appears that yearly net retail inflows have fallen from a record level of $19.98 billion at June 2001 to $17.95 at September 2001.

However, despite the downfall in figures, there were still some winners. National/MLC continues to dominate the top position for total funds under management, further increasing the gap between it and Commonwealth Bank which still remains a close second. AMP has held its third place position, keeping the top three unchanged since the June 2001 quarter. Colonial First State Investments Group overtook Westpac Banking Corporation to take out 5th position.

Other standout features of the report were the master fund market falling in size over the quarter despite net inflows in the order of $4 billion, with falling equity markets once again taking their toll on asset levels. The top 10 master funds now account for 91.13 per cent of the market compared with 88.5 per cent at June 2001.