Australian Retirement Income Funds Continue Strong Growth

September 16, 2011 ( - Retirement Income funds under management in Australia continued to grow strongly up by a further 10.2% over the past year, according to Plan for Life (PFL), an Asset International company.

This is despite a flat result in the latest June quarter when they actually decreased by a marginal 0.4%, a press release said. All of major companies reported increases in business and among the highest in percentage terms were Challenger (20.2%), Commonwealth/Colonial (16.5%), Macquarie (11.6%), BT (11.0%), and AMP (9.0%).  

In its Analysis of Retail Managed Funds as of June 2011, PFL reported during the June quarter Inflows to Retirement Income funds increased by 5.9%, while over the whole of the past year they jumped by more than a quarter, up 25.6%, with Challenger, BT, IOOF, and Commonwealth/Colonial achieving the highest growth rates among the major companies.  

Super funds were fairly flat over the June quarter, down by just 0.6%. Nevertheless over the past year they increased by 6.5% with National Australia / MLC and Commonwealth/Colonial reporting the best performances.  

Overall Gross Inflows into superannuation increased by 7.2% year on year with the usual seasonal factors contributing to a 31.2% jump reported in the latest June quarter. BT (18.3%), Commonwealth/Colonial (12.5%) and National Australia / MLC (11.8%) all reported double digit percentage increases in their business while Macquarie (-18.1%) saw its fall.  

Overall, Retail Managed Funds declined 1.5% during the June 2011 quarter to $510.7 billion; however, over the past year they were still in the black, up slightly by 2.5%.   

PFL says this admittedly modest result was not a bad achievement given background spectres that include: 

  • a possible double dip recession and ongoing high unemployment in the U.S. despite all the “quantitative easing”/money printing, and 
  • an even more dire situation in Europe with continuing sovereign debt crises resulting in among other things very serious doubts about the future viability of the Euro currency in its current form. 

Gross Inflows for the year to June were $155.6 billion, down by over a quarter or 26.1% on the previous 12 months; however, this was due to a contraction in Cash Trust business with money instead flowing into bank accounts attracted by the government guarantee.  

During the latest June quarter Inflows in fact rose 17.9% but mainly due to end of financial year seasonality. 

Excluding Cash Management Trusts & Funds, Retail Managed Funds actually increased by 5% over the past year despite all the uncertainty regarding the short to medium term outlook for the world economy. Inflows were up 6.6% year on year.  

Cash Management Trusts & Funds were more or less static during the June quarter, up just a very marginal 0.2%. However, over the whole of the past year it was a different story with funds under management being almost halved, down 47.7%, as cash deposit business was rather redirected into the banking system with its government backed guarantees.  

Year on year Inflows into Cash Trusts were likewise down by an even greater 59.7%, nevertheless during the latest June quarter they jumped 21.5%, indicating perhaps may be at last the great exodus out of Cash Trusts has run its course and things are now stabilising.  

Unit Trusts & Investment Funds fell slightly by 1.5% over the past year with only Deutsche Asset Management (6.5%) reporting any real growth. The corresponding business of all the other leading managers was either fairly flat or worse.  

Overall Inflows fell 9.8% year on year while during the June quarter they were more or less unchanged only up 0.3%. Deutsche, netwealth, and BT were the only leading managers to report any growth in their annual Inflows.  

Investment Bonds remains a relatively dormant market down 0.9% over the past year. Overall Inflows declined 7.9% year on year.  

Plan For Life, an Asset International company, specializes in providing accurate statistical information and analyses covering the financial services, funds management, and life insurance markets.  

More information is available at