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27.22 MANAGED FUNDS TOTAL ASSETS, By type of institution - 30 June
The managed funds industry is difficult to measure because of the large amounts of financial interaction between managed funds institutions and fund managers, and between fund managers themselves. Consequently, double counting of funds which are 'churning' through the system needs 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 it those funds managed on behalf of other clients such as governments, corporations, charities, overseas clients and 'net-off' funds sourced from other domestic fund managers. Table 27.23 provides this measure of the total funds management industry.
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, for example, 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:
Funds of a speculative nature that do not offer sufficiently liquid redemption facilities - for example, 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 27.24 shows consolidated assets by type of institution.
Investment managers are employed on a 'fee-for-service' basis to manage and invest in approved assets, on their clients' behalf. They provide a sophisticated level of service, matching assets and liabilities. They act in the main 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 offices, 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 2009, $691.0b (57% of the consolidated assets of managed funds institutions) were channelled through investment managers. Investment managers also accept money from investors other than managed funds institutions. At 30 June 2009, investment managers invested $309.8b on behalf of government bodies, general insurers and other clients, including overseas clients.
Table 27.25 shows the total unconsolidated assets of each type of managed fund institution, and the amount of these assets invested through investment managers.