Aussie funds pool to hit $1.32 trillion
Australia's mutual fund industry is set for a bonanza over the next decade, with assets under management forecast to reach a total of US$1.32 trillion by 2015.
Latest figures from the Reserve Bank of Australia show the country has leapfrogged Italy to become the world's fourth-largest mutual fund asset pool, with US$433.6 billion under management. The research has been compiled by the Investment Company Institute on behalf of the International Investment Funds Association.
The business opportunity provided by this rapid growth has been spotted by foreign investment houses. T Rowe Price is moving into Australia through a joint venture with the Challenger Financial Services Group, and Allianz Dresdner Asset Management has also announced expansion plans to build its presence in Australia. Foreign fund managers increasingly see Australia as the hub of their Asia-Pacific operations, as Credit Suisse Asset Management showed when it made Sydney its Asian hub two years ago.
Industry players in Australia attribute the growth in mutual fund assets to the stability of the country's equity market, the strength of the Australian dollar and the compulsory retirement savings system.