Assets under custody rose 5.7% to $5 trillion in the six months to June 30, 2024, according to findings from the Australian Custody Services Association (ACSA).

This represents a modest increase from the previous period, when assets under custody rose 1.9 percent to $4.5 trillion in the second half of 2023.

Australia’s leading industry body for asset custodians and service providers said markets had demonstrated strong momentum in the first half of the year, with assets exceeding $5 trillion for the first time.

Over the period, Australian investors increased their allocation to overseas assets by 11.4% to $1.8 trillion, while Australian-domiciled investment increased by 3% to $3.2 trillion.

Meanwhile, assets held in Australia on behalf of offshore investors rose 4.4% to $2.2 trillion.

ACSA chief executive David Travers said that over the past six months, investors have taken advantage of investment opportunities and the build-up of momentum in offshore markets.

"Locally, there has been more stability in asset levels reported by ACSA, with relatively little change in assets under custody, although there has been a modest increase in assets under management," Travers said.

Notably, asset service providers in Australia had $5.8 trillion in assets under management as of June 30, 2024, up 7.1 percent, and settled 11.4 million deals over the six month, which is a decrease of 2 percent.

ACSA members averaged about 87,500 trades a day on behalf of clients, according to the industry body.

JP Morgan remains the top provider by assets under custody with $1.2 trillion, an 11% increase from the previous half, ahead of State Street ($834 billion), Citigroup ($819 billion), Northern Trust ($768 billion) and BNP Paribas ($481.4 billion).

"ACSA and its members remain focused on their response to regulatory changes and evolving market framework changes, such as global moves towards T+1, continued ASX support for CHESS and its replacement program and local T+1 discussions," said Travers.

“Innovation, industry engagement and best practice solutions remain a critical focus for achieving efficiencies in custody and investment administration. ACSA remains well-positioned to address the opportunities and challenges in the coming year through our working groups and dedicated industry volunteers.”