Australians have already been approved for $3.8 billion of superannuation by the Australian Taxation Office. What does it mean for ASX shares?
Under the COVID-19 superannuation early access scheme Aussies are able to withdraw up to $10,000 in FY20 and another $10,000 in early FY21 to financially assist them through this period.
According to the ATO, $3.8 billion has been approved for withdrawal from superannuation. This total is spread across 456,000 people, which comes out to an average of around $8,300 per person.
That's a lot of money taken out of the investment system.
It will be interesting to see if some of the superannuation funds do face liquidity issues.
For the broader S&P/ASX 200 Index (ASX: XJO) it could mean share prices going temporarily lower because super funds will have to sell for whatever price they can get. Perhaps that's why share prices went lower at the start of the week. Or perhaps more of the sales will come in the coming days?
It could be even more consequential for fund management businesses.
Shares like Challenger Ltd (ASX: CGF), Pendal Group Ltd (ASX: PDL), Perpetual Limited (ASX: PPT) and Australian Ethical Investment Limited (ASX: AEF) could come under pressure.
However, there could also be opportunities if those shares are sold off despite having attractive futures. I like the prospects of Australian Ethical and Challenger, but I'm less confident about the direction of Pendal and Perpetual.
Foolish takeaway
Hopefully the withdrawal money is useful for assisting households during this time. For investors looking at the situation it could become a short-term buying opportunity to buy shares that are just being indiscriminately sold off by super funds for redemptions.
