Did you know that the combined value of assets in the Australian Superannuation wallet is larger than the market capitalisation of the Australian Stock Market.
From an ASFA Research and Resource Centre report published in July 2012
- The ASX is capitalised at about AUD1.2 tn (Source ASX)
- The global pension pool is about USD19.3 tn
- The Australian pool is about AUD1.3 tn and growing (predicted to reach AUD2 tn by 2014)
- The SMSF pool is over AUD 430 bn (Self-managed super fund statistical report – March 201), of which about 31% is in listed shares and 16% in property).
When I first came across this piece of information, I was somewhat stunned. Of course I realise that not all superfund assets are invested in listed Australian equities, however I was still surprised. Then on reflection, a few things drop out.
- Extrapolating between 1.3 and 2 tn from now to say mid 2014 (22 months), means average inflows of AUD318m per month
- Using the breakdown from the SMSF sector, 31% or just shy of AUD100m per month flows into the domestic sharemarket, and about AUD50m per month into property (these may not be correct, but I’m just looking at ballparks).
- Then, the average daily turnover on the ASX is around AUD4 bn
- So in turnover terms, the impact of these inflows is not significant
- What is the impact of these inflows. Are they significant in propping up or maintaining the level of the equity (and property) markets
- What is the amount of new capacity in the market (via new listings) vs. growth
And what is the effect of the cycle on the super pool, and on the statistics presented in these reports
- For example if the market is up 20%, 10%, flat, down 10% etc., then the size of the existing pool is affected, and the entry level for new money is at the current market level – so the cycle is important
So – where else is super money going. Are other asset classes becoming more of less popular.
Food for thought….