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Offshore investments propel assets under custody to $4.5tn

  •  
By Jessica Penny
  •  
2 minute read

The Australian Custodial Services Association has released its latest industry statistics.

Assets under custody grew by 1.9 per cent to $4.5 trillion in the six months to 31 December 2023, according to data from the Australian Custodial Services Association (ACSA).

The peak industry body for custodians and asset service providers in Australia said that markets demonstrated increased stability with assets under custody over the past six months, maintaining a gradual increase from the June reporting period.

Namely, ACSA reported a 2.1 per cent rise in assets under custody to $4.4 trillion in the six months to 30 June 2023.

Australian investors also increased their allocation to overseas assets during the period by 5.1 per cent to $1.6 trillion, with Australian-domiciled investments remaining stable at $2.9 trillion.

Meanwhile, assets held in Australia on behalf of offshore investors increased by 5.6 per cent to exceed $2 trillion.

ACSA chief executive officer David Travers said that investors have continued to take advantage of offshore investment opportunities despite subdued global economic factors.

However, Mr Travers added that green shoots of economic improvement are beginning to appear.

“Locally, there has been surprising stability in the asset levels reported by ACSA, with relatively small changes in assets under custody and assets under administration on stable transaction volumes,” he said.

Moreover, asset servicing providers in Australia had $5.4 trillion in assets under administration as at 31 December 2023, up 3 per cent, and settled 11.6 million trades, an increase of 1 per cent over the prior period.

ACSA members, on average, settled approximately 89,250 trades per day on behalf of clients, according to the industry body.

JP Morgan remained the top provider by assets under custody at $1.08 trillion, a 0.2 per cent loss on the previous half, ahead of Citigroup ($797.2 billion), State Street ($752.3 billion), Northern Trust ($674 billion), and NAB Asset Servicing ($448.5 billion).

“ACSA and its members remain focused on their response to regulatory change, the evolving changes to market framework, such as global market moves to T+1, and continued support for the ASX on CHESS and its replacement program,” Mr Travers added.

“Innovation, digital asset evolution and standards remain a critical focus for achieving efficiency in custody and investment administration. ACSA remains well placed to address the opportunities and challenges in the coming year through our working groups and dedicated industry volunteers.”