Alternatives remain prominent in new product registrations

According to APIR Systems, which identifies, codes and manages reference data for unlisted financial products, alternatives made up for more than half (52.57 per cent) of all new product registrations in the 2023–24 financial year.

Commenting on the data, APIR chief executive Chris Donohoe said that clients are currently prioritising investments to bolster their cash flow, leading more funds to offer more frequent dividend payments.

“While registrations of equities funds were up in number on the previous year, they were down as a percentage of total registrations, accounting for 25.81 per cent of new registrations,” Donohoe said.

“Registrations of both fixed income products at 14.91 per cent and cash/cash equivalent products at 7.43 per cent were slightly higher than the two previous years.

“The majority of new registrations – 86.50 per cent – stated the investment objective as income and growth or income only. This ties in with a move to more frequent distribution of income, with 65.14 per cent of funds distributing monthly or quarterly.”

According to the data, vanilla-managed investment products have continued to be the fund classification of choice with 554 new registrations in the last financial year, up from 493 in the previous year.

There was also a significant increase in the number of registrations of both fund of fund products (up 54.75 per cent) and real estate investment trust products (up 76.47 per cent), considerably higher than the three-year rolling average.

According to the data, Donohoe said, the industry has seen considerable growth in wholesale products, however, retail has remained the most prominent.

“Over half of the registrations (57.84 per cent) had a domestic geographical focus, 31.49 per cent had a global (including Australia) focus and 10.68 per cent had an international (excluding Australia) focus,” he said.

“There was significant growth in the number of wholesale products registered compared to the previous two years. In all, 46.89 per cent identified as wholesale products, however, retail funds – at 47.57 per cent – remain the highest category.”