Publishing house Rainmaker Information’s report found that the ASX market capitalisation owned by local funds fell from 39 per cent to 36 per cent in the past four years up to 30 June 2021.
Not-for-profit, industry and public sector funds were the biggest catalyst for the drop as they have been diversifying away from the ASX.
It was also noted that super funds held $908 billion in Australian equities this year, up 20 per cent from 2018 ($758 billion). In that same period the ASX grew 28 per cent from $1.9 trillion to $2.5 trillion.
“These results shows that while super fund influence over the ASX is likely to grow over time, the rate of this growth will be weaker and smaller than earlier expected,” Rainmaker Information’s executive director of research and compliance, Alex Dunnin, said.
“These new trends, should if anything, raise alarm bells amongst Australia’s policymakers that Australia has to work harder to make investing in the Australian share market more attractive.”
Mr Dunnin said only focusing on the role Australian super fund play in the local share market would be to “totally miss the bigger picture” of what is happening with the global markets.
Rainmaker believes recent trends suggest that super funds will only hold 40 per cent of the ASX by 2030.
