Assets under custody grew by 5.7 per cent to $5 trillion in the six months to 30 June 2024, according to findings from the Australian Custodial Services Association (ACSA).
This represented a modest increase on the previous period, which saw assets under custody grow by 1.9 per cent to $4.5 trillion in the second half of 2023.
The peak industry body for custodians and asset service providers in Australia said that markets demonstrated strong momentum in the first half of the year, marking the first time that assets exceeded $5 trillion.
Over the period, Australian investors increased their allocation to overseas assets by 11.4 per cent to $1.8 trillion, while Australian-domiciled investments increased 3 per cent to $3.2 trillion.
Meanwhile, assets held in Australia on behalf of offshore investors increased by 4.4 per cent to $2.2 trillion.
ACSA chief executive David Travers said that in the past six months, investors are taking advantage of investment opportunities and momentum building in offshore markets.
“Locally, there has been greater stability in the asset levels reported by ACSA with relatively small changes in assets under custody, although there was a moderate uplift in assets under administration,” Travers said.
Namely, asset servicing providers in Australia had $5.8 trillion in assets under administration as at 30 June 2024, up 7.1 per cent, and settled 11.4 million trades in the six months, a decrease of 2 per cent.
ACSA members, on average, settled approximately 87,500 trades per day on behalf of clients, according to the industry body.
JP Morgan remained the top provider by assets under custody at $1.2 trillion, an 11 per cent increase on the previous half, ahead of State Street ($834 billion), Citigroup ($819 billion), Northern Trust ($768 billion), and BNP Paribas ($481.4 billion).
“ACSA and its members remain focused on their response to regulatory change and evolving changes to market frameworks, such as global moves toward T+1, continued support for the ASX on CHESS and its replacement program, and local discussions on T+1,” Travers said.
“Innovation, industry engagement, and best practice solutions 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.”
