International assets under custody increased by 14.5 per cent over the first six months of this year compared to a 3.3 per cent increase for domestic assets, according to figures from the Australian Custodial Services Association (ACSA).
The disparity is partly explained by the tilt many leading funds, including the Future Fund, have taken away from Australian equities – which many consider to be overvalued – and into international equities.
The total amount of asset under custody invested domestically stands at $1.7 trillion, while the amount held in international assets stands at $740 billion.
Northern Trust was the fastest growing custodian in Australia over the last six months according to ACSA. Its total assets under custody for Australian investors grew by 13.6 per cent from $147 billion to $167 billion.
The next fastest growing custodian was JP Morgan which saw growth in assets under custody of 10.5 per cent.
By size the largest custodian is still NAB Asset Servicing which saw growth in assets under custody of 6.6 per cent to $673 billion, with JP Morgan second at $463 billion.
Northern Trust’s gains are due to gaining Insurance Australia Group, Energy Industries Superannuation Scheme and Australia Post Superannuation Scheme as clients in 2014.
HSBC Bank retains its position as the major sub-custodian in Australia with $684 billion in sub-custody assets, a figure that represents 66 per cent of all Australian sub-custody assets.