Value of managed funds

IBISWorld forecasts the value of managed funds to rise by 3.5% in 2024-25, to reach $4,830.6 billion. The value of managed funds is largely driven by the performance of the All Ordinaries stock market index. Australian managed funds growth has been driven by strong equity gains, consistent net inflows, particularly from compulsory superannuation and a favourable economic backdrop. The ASX 200 generated a 7.5% price return over the 2024 calendar year, while gold prices soared 27% (which also helped boost the ASX 200) during the same period, reinforcing resource sector outperformance. Net inflows, especially from compulsory superannuation, closely tracked these equity gains, supported by adviser confidence and improved wholesale allocations. The RBA's maintenance of a 4.10% cash rate alongside a reduction in inflation to 2.9% in Q1 2025 is contributing to a stable monetary environment, compressing real yield volatility and lowering discount rates, factors which collectively supported elevated asset valuations and encouraged continued capital allocation into managed super funds. Meanwhile, the unemployment rate remained near historic lows at 4% as of March 2025 and the Superannuation Guarantee rose to 11.5% in July 2024. Collectively, these factors have grown Australian managed funds' valuations by creating more inflows, thereby driving growth in fund assets.

Despite wider economic disruption caused by the COVID-19 pandemic, including the All Ordinaries index falling below 5,000 index points in March 2020, the impact was relatively short-lived. The All Ordinaries Index recovered over 2020-21, reaching new record highs by the end of the year, with the Australian government and governments across the globe implementing measures to stimulate economic activity. Furthermore, the record-low interest rate environment that characterised Australian investing over the past five years contributed to the appeal of equity investments, which prompted increased investment. However, as part of the Federal Government's COVID-19 relief package, eligible individuals were granted early access to superannuation accounts, with outflows constraining growth in the value of managed funds in 2019-20. Early access to these funds concluded on 31 December 2020.

Growth in the value of managed funds has been relatively consistent over the past five years, as volatility in asset prices has largely been offset by stable superannuation contributions. Disposable incomes have driven a hike in the value of superannuation funds, in turn boosting the value of managed funds over the period. Successive increases of the current superannuation guarantee rate to 11.5% in July 2024 have amplified the benefit of stable superannuation contributions to the value of managed funds. Overall, IBISWorld forecasts the value of managed funds to grow at a compound annual rate of 4.9% over the five years through 2024-25.