Total assets under custody keep growing

The total assets under custody for Australian investors grew by 4.9 per cent in the six months to 31 December, last year, representing over $3.49 trillion in value, according to the Australian Custodial Services Association (ACSA).

As well as asset values increasing, the transaction volumes for equities also increased over the six-month period, continuing the upward trend, and 9.5 million trades were settled in the second half of 2017.

ACSA said that these settlements, which are measured to determine transactions, illustrated “the significant support the custody industry provides to the trading activities of institutional investors.”

Investment in unlisted trusts also grew to over 750,000 transactions in the six months to 31 December, 2017, with the asset type now representing a large portion of institutional investment.

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ACSA said that while unlisted unit trusts (also known as managed funds) had traditionally been a problematic security type, they were showing growing popularity.

Challenges faced by those investing in unlisted trusts include a lack of central exchange, a high incidence of non-standard and manual processes, and no constituent data depository for key managed fund characteristics.

ASCA said that it was working with the market to identify areas of reform to help improve investment in the asset type for owners, fund managers and other participants.

It pointed toward the development of the Asia Region Funds Passport and Corporate Collective Investment Vehicles, both of which are underpinned by government policy, as examples of emerging improvements.

Overseas client investment into Australia (technically being assets held in sub-custody) also grew, consistent with the overall growth in total assets under custody. It jumped six per cent to $1.47 billion during the second half of last year.