1 The statistics presented in this publication have been compiled from the ABS Survey of Financial Information, the Australian Prudential Regulation Authority's (APRA) Registrable Superannuation Entities (RSEs) reporting forms, and the Australian Taxation Office's (ATO) Self-managed Superannuation Fund Annual Return. Some brief notes on the concepts, sources and methods employed follow. A full description and glossary are provided on the ABS website, <http://www.abs.gov.au> under "Statistics", by selecting "Finance", then "Managed Funds".
MANAGED FUNDS INDUSTRY
2 The term "managed funds" is used loosely in the financial community to embrace two broad types of institutions. The first are managed funds institutions (eg life insurance corporations, superannuation funds and unit trusts, etc) which buy assets on their own account. The second are investment or fund managers which provide, on a fee for service basis, professional investment services for the managed funds institutions, as well as others with substantial funds to invest. The managed funds industry is difficult to measure because of the many inceptions and winding-up of funds each quarter, due to the large amount of financial interactions between managed funds institutions and investment managers, and between investment managers themselves. Consequently double counting of funds which are "churning" through the system needs to be considered in order to derive a net measure of the managed funds industry.
3 The approach taken by the ABS is to provide a measure of the managed funds industry which includes the consolidated position of the managed funds institutions plus funds under management of investment managers on behalf of clients other than managed funds institutions, less any cross investment between fund managers. This measure is wider than the measure provided by the consolidated assets of managed funds institutions view.
MANAGED FUNDS INSTITUTIONS
4 Managed funds institutions are those financial intermediaries which operate in the managed funds market by acquiring assets and incurring liabilities on their own account. Typically, these institutions arrange for the ‘pooling’ of funds from a number of investors for the purpose of investing in a particular type or mix of assets, with a view to receiving an ongoing return or capital gain. However, funds of a speculative nature that do not offer redemption facilities (e.g. agriculture and film trusts) and funds not established for investment purposes (e.g. health funds and general insurance funds) are excluded.
5 The managed funds institutions covered by the statistics in this publication are: Life Insurance Corporations, Superannuation Funds, Public Offer (Retail) Unit Trusts, Friendly Societies, Common Funds, and Cash Management Trusts.
RESIDENT INVESTMENT MANAGERS
6 An investment manager is an entity that specialises in the investment of a portfolio of assets on behalf of, and subject to the directions given by its clients, such as superannuation funds and life insurance corporations. The funds which investment managers invest remain the asset of their clients and are not brought to account on the balance sheet of the investment manager. The ultimate responsibility for the investment remains with the client.
7 For the purposes of this publication, investment managers need to satisfy the following criteria:
- be Australian resident entities (see relevant definition);
- offer pooled investment products (eg. wholesale and/or retail trusts) which are registered with Australian Securities and Investments Commission (ASIC); and individual portfolios, eg mandates for institutional investors and/or separately managed accounts (SMAs) for individuals;
- be managers who actively invest on behalf of clients, where clients retain ownership of the assets; and
- predominately rely on management fees, rather than dividends and interest income, for the major part of their income.
Investment managers are generally subsidiaries of life insurance offices, banks, merchant banks, or organisations related to these types of institutions. They can be either separately constituted legal entities or form a segment of a particular financial institution.
ASSETS, VALUATION AND TIME SERIES COMPARISONS
The data tabulated in this publication are the stocks of assets held by the various types of institutions, classified by type of asset. The classification of assets in this publication follows that which is contained in the ABS publication Australian National Accounts, Finance and Wealth
(cat. no. 5232.0). Definitions of the various types of financial instruments are given in the glossary on the ABS website.
Providers of managed funds statistics are requested to report assets at their market value.
Movements between periods in the levels of assets of managed funds institutions reflect three key components: transactions in particular assets, valuation changes arising from price changes in the assets, and occasionally reclassifications between institution types.
SUPERANNUATION (PENSION) FUNDS
From June quarter 1995 until the December quarter 2004, the ABS conducted a quarterly "Survey of Superannuation Funds". This survey was used by APRA to compile "Superannuation Trends" and by the ABS to compile superannuation fund data in Managed Funds, Australia
(cat. no. 5655.0).
Prior to December 2004, the ABS estimated asset detail for some superannuation funds using quarterly information from funds with total assets over $60m. From December 2004, the type of assets held by superannuation funds has been refined by the introduction of a range of compilation methods, depending on the size of the superannuation fund. Where possible, quarterly asset details provided by the superannuation fund itself is the basis of the compilation; otherwise, its annual asset detail is the basis of the compilation.
From December quarter 2004, this data source was replaced by a new quarterly data collection conducted by APRA for superannuation funds with assets greater than $50m, supplemented by estimates for other APRA regulated funds and estimates of self-managed funds regulated by the ATO.
METHOD OF CONSOLIDATION
Estimates of the consolidated assets of managed funds are derived by eliminating any cross-investment that takes place between the various types of institutions. For example, investments by superannuation funds in public unit trusts are excluded from the assets of superannuation funds in a consolidated presentation. However it is not possible to apportion cross-investment at the level of detail presented in the unconsolidated tables.
Time series electronic spreadsheets for the tables in this publication are available free on the ABS website <http://www.abs.gov.au
> from the "Downloads" tab of this Issue <http://www.abs.gov.au/ausstats/abs@.nsf/mf/5655.0
Users may wish to refer to other related materials available on the ABS website, <http://www.abs.gov.au
> under "Statistics", then "Finance".
Users of statistics relating to the managed funds industry in Australia may also be interested in the following ABS releases:
Users may also wish to refer to the APRA website, for Life Insurance and Friendly Societies <http://www.apra.gov.au/lifs/Pages/default.aspx
> and APRA regulated superannuation funds <http://www.apra.gov.au/Super/Pages/default.aspx
>, and the ATO website page for ATO regulated Self-managed superannuation funds <http://www.ato.gov.au/Super/Self-managed-super-funds/