LICs see only 12% annual growth in five years
Growth in managed accounts and exchange traded products (ETPs) is fast outpacing listed investment companies (LICs) which grew 12% per annum over the five years to 30 June, 2020.
According to Rainmaker research, this was compared to 51% per annum growth for ETPs, 87% per annum growth for managed accounts, and 71% growth of mFunds over the same time period.
Rainmaker executive director of research, Alex Dunnin, said in the last few years LIC assets had shifted from Australian equities towards fixed interest.
Two-thirds of LIC assets were held in Australian equities, while 27% were in international equities, 10% in fixed interest, and about 1% in property and infrastructure.
"Fixed interest is becoming popular as investors, especially retirees, are desperate to get better yields than they get from term deposits, and seek investments that generate income,” Dunnin said.
"LIC managers tend to specialise in a single asset class, with only three of the 20 largest LIC managers operating across multiple asset classes. Although, smaller and medium scale managers were more likely to manage funds across classes."
Of the 76 investment managers operating in the space, 71% were specialist LIC operators, while 29% were broader investment managers that operated across a wider range of product segments.
The largest LIC managers were AICs, Argo, and Magellan at with $8.36 billion, $5.28 billion and $4.4 billion respectively.
Recommended for you
Perpetual has seen AUM rise 6 per cent in the last quarter but the departure of a longstanding JOHCM fund manager led to outflows of $2.2 billion from his strategy.
In the latest Meet the Manager profile, Money Management speaks with Michael Skinner, founder and managing director at Blackwattle Investment Partners.
Global fixed income fund Bentham Global Opportunities has been added to several major platforms, enabling it to be accessed more easily by financial advisers.
Following yesterday’s news about First Sentier Investors closing four investment teams, a second global asset manager has announced it is closing its only dedicated Australian fund.
