The retail investment market has seen a turnaround in its long-term trend of falling funds under management and administration (FUMA) due to improving market conditions, according to DEXX&R.
DEXX&R's Analysis Market Share Report found that FUMA for retail or non-super investments increased by 3.8 per cent to reach $4.4 billion over the December quarter, as cash flow stabilised in response to improving markets.
"The non-super segment has been in a continual decline since the global financial crisis (GFC)," DEXX&R managing director Mark Kachor told InvestorDaily.
"That's the market segment that had greater exposure to geared investments and it is wholly discretionary.
"People have been moving out of managed funds and into cash which is a long-term trend since basically 2008, and that's really had an impact on FUM in that segment."
Since the GFC, the retail investment segment has typically seen net cash outflows of $2 billion to $4 billion, but over the December 2012 quarter segment outflow had reduced by $480 million.
Mr Kachor said the retail investment market is looking more positive, with global markets improving and investors looking at more risk: "If anything, the turnaround has been that the decline is less than it has been and it looks like we're sort of reaching the bottom in terms of the decline of funds in the market segment," he said.
"People are prepared to be a little bit more adventurous and also, realistically, the interest rates are either at or near their lowest levels.
"So, the market conditions overall are set for a return in investing in the typical managed funds."
Total FUMA in the retail and wholesale markets grew over the December quarter by 3.5 per cent, or $28.1 billion, up from $801 billion at September to $829 billion at 31 December.
Over the full calendar year, retail and wholesale FUMA increased by 8.3 per cent, from $766 billion at December 2011.
