Superannuation By Fund Type Analysis To Sep 30 2024 - Retail Funds Fighting Back?
On October 27, 2024, APRA published its latest superannuation data by fund type, covering the period up to September 30, 2024. We combined this with financial adviser information, population stats from ABS, and recent SMSF data from ATO.
This analysis reveals trends that may affect advisory firms, licensees, and wealth management companies. Member interactive dashboards have been updated for customised charts. Note: APRA has not updated asset allocations; our latest data is for June 2024.
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Key Findings (With Dashboard Numbers Referenced):
The main finding is that Retail Funds have bounced back. Not just this quarter, but over several and may have just about turned the corner after a torrid time post the Royal Commission.
Key standouts for the Retail Funds being:
Growth This Quarter (D2 - select Chart Table $ and % Growth) -Net assets grew by $32 billion, a 4.28% increase. Industry funds rose by $55 billion, or 4.2%. SMSFs increased by $25 billion, a 2.66% rise.
Investment returns (D3 - select charts and dates) - see also chart below The Qtly Totals Table shows that over the last eight quarters (Q4 2022 to Q3 2024), Retail funds have a total return of 23.1%, while industry funds have a return of 20.6%. Over five years, Industry funds still perform better, with a return (annualised) of 6.2% compared to 5.5% for retail funds, a difference of 0.7%. In Q4 2022, the difference was 1.5%. This improvement is likely due to asset selection, as seen in dashboards 8 and 9, with Retail funds typically holding fewer assets in property and infrastructure.
Benefit Payments (D6) -Benefit payments are increasing for all fund types, with more being paid as pensions rather than lump sums. The main change is from Industry Funds, which paid a total of $5.12 billion in Q3 2019 and now pays $10.69 billion, a 109% rise. Retail Funds went from $7.77 billion pre-COVID to $12.22 billion now, a 57% increase.
Net Transfer To SMSFs (D7) - The transfer of money to SMSFs is rising quickly for Industry funds but slowing for Retail funds. In the last year, Industry Funds net loss was (-$3.734 billion), while Retail Funds it was (-$1.511 billion). In Q3 2019, transfers were (-$0.379 billion) for Industry Funds and (-$2.198 billion) for Retail. Since 2013, the trend has flipped between Retail and Industry Funds.
Other highlights of the data include:
Adviser opportunity continues to grow (D1) - By dividing the total number of advisers into the total pool of super funds, the amount is $252 Mil per adviser. A slight increase from $246 Mil last quarter. However, a significant change to Q4 2018, the amount was $$88 Mil.
Industry Funds Just Keep Growing D2: Despite the commentary above re Retail funds, Industry funds are still growing in real terms. Their market share is now at 35.5% a small improvement from 35.2% of last quarter. SMSFs dipped slightly to 24.6% from 24.8% and Retail increased to 20.2% from 20.0%.
Net Flows (D5):Retail funds saw a positive net flow of $3.08 billion; for the fourth consecutive quarter it was ‘positive’. Industry Funds had a much higher net flow of $12.77 billion, but this was the lowest amount since Q3 2021 which was $4.83 billion. Overall, all APRA Funds (excludes SMSFs) had a solid quarter at $14.96 billion, up from $12.85 billion in Q3 2023.
Fees as a Percentage of Total Assets Continue to Decline (D10): Industry funds have lower fees compared to Retail funds, with the fee gap stable in recent years; Industry funds are around 0.488% (rolling 12 months) while Retail funds are at 0.488%.
Compare The Funds - Last eight quarters Retail Funds gained the best ‘total’ return.
You may also wish to see our detailed analysis of SMSF Funds, which also includes an overlay of Advisers
