The NZ managed funds market edged closer to the $300 billion level in the June quarter, topping off 18 months of solid year-on-year growth.
New data from the Reserve Bank of NZ (RBNZ) shows the local funds sector – excluding government vehicles – grew 5 per cent over the three months to June 30 to reach a record high of $297.5 billion.
“Annually, total funds under management went up 11%,” the RBNZ report says. “This is the sixth consecutive quarter with positive annual growth.”
Over the two years to the end of June, assets under management rose more than 22 per cent as mostly upbeat markets combined with inflows to boost holdings.
Since June 30, 2014, the NZ funds universe, as measured by the RBNZ, has almost tripled from the $110 billion recorded at the time.
The official central bank data shows KiwiSaver has, of course, served as the main growth engine over the last decade with the retail fund sector adding supplementary power.
KiwiSaver and the retail funds business were about equal by size 10 years ago but the former has subsequently grown by five-times compared to three-times for the latter to total $67.7 billion at the latest count.
By contrast, the traditional superannuation funds sector has idled along from $24 billion in the June 2014 report to almost $31 billion at the same date this year.
The full RBNZ dataset also includes about $50 billion of ‘individually managed portfolios’ and more than $21 billion of wholesale funds.
According to the June quarter report, almost half ($140.3 billion) of fund assets are invested in listed shares with a further quarter ($78.6 billion) in long-term bonds.
Cash is also an increasingly popular asset class for fund investors while shorter-term bonds remain a smaller ($13.2 billion) and shrinking option.
“Short term debt securities recorded a quarterly decrease of 12.7%, down to $13.2b, as well as an annual decrease of 18.6%,” the report says.
“Cash increased 9.2% quarterly from $45.2b to $49.3b and recorded a 23.9% increase annually.”
The RBNZ quarterly survey covers 37 fund managers with more than $1 billion under management, equating to about 97 per cent of the total industry: every year the central bank also adds in data from the remaining 30 or so managers that comprise the remaining 3 per cent of the sector.