Funds flowing into Australian Managed Investment Trusts from overseas have doubled from $20bn to $40bn since 2010, according to a new report by Perpetual and the Financial Services Council.
The 2014 Australian Investment Managers Cross-Border Flows Report released today provides a unique insight into the flow of funds into Australian Managed Investment trusts by region, asset class and investor type.
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The FSC-Perpetual report shows that Japan is by far the biggest contributor accounting for 33 per cent ($9.9 billion) of foreign fund flows. It shows the significance of Japan as an existing trading partner and highlights the potential for future opportunities under the Japan Australia Economic Partnership Agreement (JAEPA).
New Zealand and South Korea were also prominent investment sources in the Asia Pacific Region contributing 14 per cent ($4.3 billion) and 3 per cent ($1.0 billion) to fund inflows respectively.
Geoff Lloyd, CEO of Perpetual said: "We are highly encouraged by the continued increase in investment flows since 2010."
"We believe the Managed Investment Trust regime has made a major difference to inbound investment and highlights how well delivered policy can make a substantial impact.
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By GlobalData"We are not surprised that the Asia Pacific region continues to dominate – representing 55 per cent of total fund flows. It is a reminder just what an important region it is and why Perpetual is strongly committed to this region with our own Singapore office that has been in operation since 2007. We are hopeful that the Asia Region Funds Passport, to be piloted from January 2016, will make it easier for two way flow of funds between Fund Passport nations," Mr Lloyd said.
FSC CEO John Brogden added: "The signing of free trade agreements with China, Korea and Japan provides a significant opportunity to build on the existing flows of funds from these countries."
"It is critical that the remaining tax changes recommended in the Johnson Report are implemented so Australian fund managers can take full advantage of the these free trade agreements and the Asia Region Funds Passport."
"Australia needs a coordinated effort to make the most of our comparative advantage in funds management. We have recommended to the Financial System Inquiry that a body be established to coordinate the efforts of Treasury, the Department of Foreign Affairs and Trade, ASIC and Austrade," Mr Brogden said.
