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1301.0 - Year Book Australia, 2012  
Latest ISSUE Released at 11:30 AM (CANBERRA TIME) 24/05/2012   
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Financial system

MANAGED FUNDS

The term 'managed funds' is used loosely in the financial community to embrace two broad types of institutions. The first are managed funds institutions (such as life insurance companies, superannuation funds and unit trusts), which buy assets on their own account. The second are investment or fund managers, which act as investment agents for the managed funds institutions, as well as others with substantial funds to invest. Investment managers have relatively small balance sheets because most of the assets they manage are purchased on behalf of clients. The 'managed funds total assets' (graph 27.25) represents assets of managed funds institutions only. The growth in the assets of superannuation funds between 2006 and 2007 coincides with changes to superannuation legislation in June 2007 designed to attract investor funds. The decrease in the assets of managed funds from 2007 to 2009 largely reflects fluctuations in stock market valuations, particularly as a result of the global financial crisis, which began in late 2007.

27.25 MANAGED FUNDS TOTAL ASSETS, By type of institution - 30 June



The managed funds industry is difficult to measure because of the large value of financial interaction between managed funds institutions and fund managers, and between fund managers. Consequently, double counting of funds, which are 'churning' through the system is a problem to be addressed in order to derive a true measure of the funds management industry. One approach is to take the consolidated assets of collective investment institutions, add to them those funds managed on behalf of other clients such as governments, corporations, charities, overseas clients then, 'net-off' funds sourced from other domestic fund managers. Table 27.26 provides this measure of the total funds management industry.


27.26 MANAGED FUNDS INDUSTRY, Total funds under management30 June
2009
2010
2011
$m
$m
$m

Total consolidated assets of managed funds institutions
1 237 979
1 360 072
1 449 095
plus
Total funds under management of investment managers sourced from Australian entities other than managed funds institutions
289 715
313 332
325 372
plus
Total funds under management of investment managers sourced from overseas
39 756
50 592
61 465
less
Total funds under management of investment managers sourced from other investment managers
13 000
14 760
11 602
Total
1 554 450
1 709 236
1 824 330

Source: Managed Funds, Australia (5655.0).


MANAGED FUNDS INSTITUTIONS

Managed funds institutions pool the funds of many small to medium investors and use them to buy a particular type, or mix, of assets. The asset profile can be structured to satisfy individual investor requirements regarding the degree of risk, the mix of capital growth and income, and the degree of asset diversification. Managed funds institutions in ABS statistics comprise the following:
  • life insurance corporations
  • superannuation (pension) funds
  • public offer (retail) unit trusts
  • friendly societies
  • common funds (managed by trustee companies) and
  • cash management trusts.

Funds of a speculative nature that do not offer sufficiently liquid redemption facilities (e.g. agricultural and film trusts) are excluded.

To derive the total assets of each type of managed funds institution in Australia on a consolidated basis, it is necessary to eliminate the cross investment between the various types of institution. For example, investments by superannuation funds in public unit trusts are excluded from the assets of superannuation funds in a consolidated presentation. Table 27.27 shows consolidated assets by type of asset.


27.27 CONSOLIDATED ASSETS OF MANAGED FUNDS30 June
2009
2010
2011
Type of asset
$m
$m
$m

Deposits
161 928
170 080
189 194
Short-term securities
97 432
99 955
78 564
Bonds, etc(a)
74 641
82 798
78 188
Derivatives
3 885
4 055
2 692
Loans and placements
39 733
38 449
34 314
Shares
306 866
374 653
430 367
Units in trusts (wholesale and retail)
144 625
162 108
178 467
Other financial assets
30 912
31 376
41 753
Land, buildings and equipment
150 511
154 138
161 853
Other non-financial assets
18 775
17 430
16 603
Overseas assets
208 671
225 030
237 100
Total
1 237 979
1 360 072
1 449 095

— nil or rounded to zero (including null cells)
(a) A full list can be found in the glossary of Managed Funds, Australia (5655.0).
Source: Managed Funds, Australia (5655.0).


INVESTMENT MANAGERS

Investment managers are employed on a 'fee-for-service' basis to manage and invest in approved assets, on their clients' behalf. They mainly act as the managers of pooled funds, but also manage clients' investments on an individual portfolio basis. Investment managers offer their services to a range of clients, including superannuation funds, life insurance corporations, publically listed corporations, government entities and high net worth individuals.

A considerable proportion of the assets of managed funds institutions are managed via investment managers. At 30 June 2011, $799.8 billion (43% of the unconsolidated assets of managed funds institutions) were channelled through investment managers. Investment managers also accept funds from investors other than managed funds institutions. At 30 June 2011, investment managers invested $386.8 billion on behalf of government bodies, general insurers and other clients, including overseas clients.

Table 27.28 shows the total unconsolidated assets of each type of managed fund institution, and the value of these assets invested through investment managers.


27.28 ASSETS OF MANAGED FUNDS, Invested through investment managers30 June 2011
Total unconsolidated assets of managed funds
Assets invested with investment managers
Assets invested with investment managers
Type of fund
$m
$m
% of total assets

Life insurance offices(a)
234 559
128 900
55
Superannuation funds
1 299 444
532 521
41
Public unit trusts
282 833
117 084
41
Friendly societies
6 253
1 107
18
Common funds
8 184
4 270
52
Cash management trusts
24 236
15 880
66
Total
1 855 510
799 762
43

(a) Includes both superannuation and ordinary business.
Source: Managed Funds, Australia (5655.0).

 

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Statistics contained in the Year Book are the most recent available at the time of preparation. In many cases, the ABS website and the websites of other organisations provide access to more recent data. Each Year Book table or graph and the bibliography at the end of each chapter provides hyperlinks to the most up to date data release where available.

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