In the Press
06 April 2011
Pooled funds lose cash
Financial Standard
Alison Bevege
Money is flowing out of managed funds and into bank accounts and independently managed accounts (IMAs), industry watchers said yesterday.
According to Rainmaker research, $86.4 billion dollars flowed into bank deposits in the December quarter last year, compared with $40.8 billion in the September quarter.
At the same time managed fund inflows fell, along with master fund products according to data from managed fund research company Plan For Life.
Alan Shield, director of banking research and analysis firm RFi, said investors were behaving as though in a storm and looking for a safe haven.
"In the last six to 12 months, the global economic conditions were not great," he said.
"We have seen strong growth in deposits as investors have the jitters. Also if you look at returns on term deposits ... they are generally pretty good."
Plan For Life's data showed net retail capital flowing to managed funds fell by more than 80 per cent from $1.19 billion in the September quarter to $159 million in the December quarter. While the figure sounds enormous, Simon Solomon, actuary for Plan For Life, said it was prone to volatility and could easily reverse itself.
But Plan For Life figures also showed money flowing into master fund products, including master trusts, wraps and platforms, fell from $18.7 billion in the year to December 2009 to $11.7 billion last year.
Connie McKeage, chief executive of OneVue, which provides facilities to the managed account industry, said investors had also taken their money from managed funds and put it towards independent managed accounts.
"It's going to direct shares, managed accounts and property," she said, adding exchange-traded funds were experiencing a surge in popularity.
McKeage said people wanted greater transparency and control of their super fund assets and the capital gains tax benefits of not being in a pooled fund.
"It's a massive shift," she said.