Low returns dampens sector FUM/A

Funds under management and advice (FUM/A) has stagnated across all sectors on the back of low investment returns in the major asset classes and negative returns in other asset classes, DEXX&R research found.

The research house's Analysis Market Share Report showed the employer superannuation segment recorded the largest percentage decrease in FUM/A of 1.7 per cent, down $2.5 billion to $140 billion at June 2016, compared to $142.5 billion at June 2015.

Of the top five employer super managers, National Australia Bank (NAB) Employer Super FUM/A was down 2.3 per cent over the 12 month period to $36.3 billion at June 2016. AMP was up 0.9 per cent to $28.4 billion, ANZ was down 3.8 per cent to $14.3 billion, while Westpac was down 3.9 per cent to $17.5 billion.

Meanwhile, 30 per cent of total FUM/A in the employer super segment was now held in the MySuper option, up from 27 per cent at March 2016, while 15 per cent was total FUM was now held in default options, down from 16 per cent at March 2016.

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Other investment options such as multi-sector, Australian shares, and overseas investments accounted for 57 per cent of total FUM/A, down from 58 per cent at December 2015.

Personal super FUM/A was down 1.5 per cent, down $3 billion to $196.7 billion at June 2016.

Westpac increased by 0.9 per cent to $32.4 billion, AMP decreased by 0.7 per cent to $47.7 billion, the Commonwealth Bank was down 1.7 per cent to $38.5 billion, IOOF was down 1.5 per cent to $11.9 billion, while National Australia Bank (NAB) was down 2.4 per cent to $29.3 billion.

The retirement income segment, however, showed growth, with an average return of 4.7 per cent over the same period due to the higher proportion of total assets held in fixed interest.