Aussie investors increase allocation to overseas assets

The allocation by Australian investors to overseas assets grew over the first six months of the year by 9.7% to $1.5 trillion while Australian-domiciled investments dropped by 1.5% to $2.9 trillion, indicating that local investors were looking to take advantage of offshore conditions, according to data from the Australian Custodial Services Association (ACSA).

ACSA chief executive, David Travers described the first half of the year as “fast-paced” and driven by a “significant amount of market and regulatory change”.

At the same time, data from ACSA shows that there was a rise in assets under custody to $4.4 trillion, which marked a rebound to levels “consistent with the prior quarter following a period of volatility in local and global markets.”

Asset servicing providers had $5.2 trillion in assets under administration in the six months to 30 June 2023, up 0.9%, and assets held in Australia on behalf of offshore investors (sub-custody assets) increased by 6.1% to $1.9 trillion.

According to Travers, macro local and global economic factors have led to surprising stability in the asset levels reported by ACSA, with relatively small changes in assets under custody and assets under administration on lower transaction volumes.

“Looking ahead, ACSA members will continue to focus on their response to regulatory change, their evolving role in supporting institutional involvement in digital assets, including cryptocurrencies, and ongoing support for the ASX on CHESS and its replacement program,” he 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 a combination of our working groups and task forces.”