INTRODUCTION

The purpose of this information paper is to inform users of changes to Managed Funds, Australia (cat. no. 5655.0) from the September 2017 release to be published on 8 December 2017.

The main changes to Managed Funds, Australia are:

• revisions to previously published data as a result of updated reporting standards and reflecting current industry practices. The new reporting standards were developed through industry consultation in 2015 to meet specific ABS' statistical requirements, as outlined in the information paper ‘Consultation with Industry on Superannuation Data Collection by Australian Prudential Regulation Authority, 2015 (cat. no. 5655.0.55.003). The revisions were foreshadowed in the June 2017 release of Managed Funds, Australia;
• the removal of the PDF publication; and
• an update to the time series spreadsheet, Table 4, Superannuation (pension) funds, unconsolidated assets and liabilities.

KEY CHANGES TO OUTPUTS

Changes to Managed Funds, Australia, outputs are primarily the result of updated reporting requirements. These updated requirements are focussed around two international standards; the System of National Accounts (SNA) and the Balance of Payments Manual (BPM) and are designed to reflect the detailed counterparty and asset class information inherent to these standards. These changes, along with the inclusion of some data items that were not previously captured has resulted in relatively minor revisions to total asset levels, for example, with the revised series being around 4% higher in June 2017. There have been significant revisions however to more detailed data items particularly as a result of a change in the treatment of Superannuation entities investments in units (equity) in wholesale trusts. The graph below shows the impact of revisions to total assets as a result of the changes detailed in this information paper. Other revisions caused by the inclusion of updated information received during processing for the September quarter 2017 will be reflected in the September 2017 Managed Funds, Australia, release.




Treatment of units in wholesale trusts

Historically in Managed Funds, Superannuation entities investments in wholesale trusts have been reported according to the underlying asset allocation of these wholesale funds. For example, where a Superannuation entity held units in an externally managed wholesale fund that in-turn invested in resident shares, these shares were reported in the Superannuation sector as if they were directly owned assets. This is known as the 'look-through' approach and was applied using supplementary information from the Survey of Financial Information - Investment Managers collection. Applying this approach was appropriate throughout the nineties and early 2000s as these wholesale funds were largely marketed as sector specific for the superannuation industry. In effect these wholesale trusts were internal superannuation sector trusts (from a System of National Accounts perspective) as investing in these funds did not result in a change in ownership from one institutional sector into another.

Given the evolution of Australia’s financial markets in the last 10-15 years, applying the 'look though' approach is no longer consistent with the SNA framework. The client base for wholesale funds has diversified significantly via platforms and other institutional investors, and has largely resulted in the disappearance of the "superannuation only wholesale trust". Indeed, these trusts are now marketed at a wider client base, and even small investors such as households can invest indirectly in these funds (excluding Pooled Superannuation Trusts). Further, the 2008 update to the SNA identified separate institutional units for these funds, non-money market investment funds and non-financial investment funds, illustrating that investment by superannuation entities into wholesale trusts (apart from internal trusts) should indicate a change of ownership into a different institutional sector.

To reflect these changes in industry practice, and to align with the SNA framework, this 'look-through' approach is no longer applied. The ‘non look-through’ approach leads to an increase in investments in units (equity) in wholesale trusts by superannuation funds, while wholesale trusts hold and report the underlying assets themselves. This does not change the total assets of superannuation funds as the amount invested in units in trusts increases by the amount that the investment in underlying assets decreases. The increase in wholesale trust assets in the non-financial investment fund sector and non-money market fund sector will be evident in Australian National Accounts: Finance and Wealth (cat. no. 5232.0) which provides comprehensive coverage of financial balance sheet information by institutional sector in the financial accounts.

Table 4, Superannuation (pension) funds, unconsolidated assets and liabilities, now includes separate data items for property and infrastructure (non-financial) wholesale trusts, and other financial wholesale trusts.

Revisions to Self-Managed Superannuation Funds Assets and Liabilities

The superannuation statistics in Managed Funds, Australia, are compiled from APRA's Registrable Superannuation Entities (RSEs) reporting forms, and the Australian Taxation Office's (ATO) Self-managed Superannuation Fund Annual Returns. As the SMSF data from the ATO annual returns is not available to the level of detail required to produce estimates on lower level assets, these estimates are derived by modelling. The assumptions used in this modelling have been updated, with changes incorporated into the revised aggregate Superannuation (pension) funds series.

Removal of PDF Publication

Commencing with the September quarter 2017 release and for all forthcoming issues, Managed Funds, Australia (cat. no. 5655.0) will no longer be produced in PDF format. The estimates will continue to be released online as time series spreadsheets available for download as excel files accompanied by analysis and commentary.

Time series spreadsheets and identifiers

Available from the Downloads tab of this information paper is a preview of the updated time series spreadsheet Table 4, Superannuation (pension) funds, unconsolidated assets and liabilities. This table shows the more detailed disaggregation of investments in units in wholesale trusts, along with new time series identifiers for series that have been affected.

The revisions to superannuation data will lead to revisions in Table 1, Summary Managed Funds Industry, Consolidated assets, Total funds under management at end of period, Table 2, Summary Managed Funds Institutions, Assets at end of period and Table 9, Investment Managers, Source of funds, Unconsolidated assets, Amounts outstanding at the end of the period. The inclusion of the additional wholesale trusts series in Table 4 has also affected the lower level aggregation structure of Table 1 and Table 2, however the data items and time series identifies for both tables are unchanged.


TIMING OF CHANGES

The revised estimates and new Table 4 will be presented in the September quarter 2017 release of Managed Funds, Australia (cat. no. 5655.0), published on 8 December 2017.


RELATED INFORMATION

• Managed Funds, Australia (cat. no. 5655.0) – issued quarterly;
• Australian System of National Accounts (cat. no. 5204.0) – issued annually;
• Australian National Accounts, Financial Accounts (cat. no. 5232.0) – issued quarterly; and
• Australian National Accounts: National Income, Expenditure and Product (cat. no. 5206.0) – issued quarterly.