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Managed fund market hits $1 trillion

Total assets under management in the managed fund sector have surged to $1.02 trillion, buoyed by an increase of $36.1 billion in September, according to Morningstar.

The latest Morningstar Quarterly Australian Asset Flows Report identified positive share market performance as the main driver behind this growth.

While equities only account for around half of the assets in the fund industry, the report stated they were responsible for 80 per cent of the growth over the quarter.

Morningstar fund research analyst Darren Cunneen said this demonstrates how strongly the performance of more volatile growth assets impacts industry assets, with equities-heavy fund managers benefitting significantly from this positive equity performance.

State Street Global Advisors' asset base increased by $5.80 billion while Schroder Investment Management experienced assets growth of just over $3 billion.

This growth was fuelled from both domestic and international share markets, while according to the report, fixed interest funds ended flat over the quarter.

Mr Cunneen said this was the result of two opposing forces.

“Australian fixed interest assets declined by just over $600 million, which was significantly more than any other asset class, while international fixed interest, at roughly half the size of its domestic counterpart, grew by $1.55 billion,” he said.

In total, there was $860 million lost in outflows from fixed interest strategies, the report states, with 90 per cent of these outflows from indexed bond funds.

BlackRock Australia and Macquarie were the worst hit, the report said.