Equity funds see $3b inflows in Q1
Equity funds gained $3 billion in assets under management during the first quarter of 2021, with half of that coming in March, according to Calastone.
In its latest Fund Flows report, the firm said more capital was added to equity funds in February and March than in all of 2019.
This particularly went into global equity funds and those focused on Australian equities while specialist and emerging market funds also saw good demand from investors.
On the other hand, outflows were seen in equity income funds after dividend cuts in Australia, Europe and the UK.
“Sell orders for equity income funds have outgunned buy orders more than 2:1 since April last year. These funds have seen outflows for nine consecutive months by the end of March,” the firm said.
Calastone said there had also been greater switching between funds with turnover rising and reaching a record amount of $7 billion in March. Over the last six months, turnover was a third higher on average than in 2019 at 35%.
Ross Fox, head of Australia and New Zealand, said: “The preference for global and Australian equity funds reflects investor judgement that this country will join the global economic leaders as the pandemic comes to an end.
“Booming commodity prices that are especially positive for Australian share prices and the economy here are clear evidence that this judgement is already proving right. The sharp increase in the Australian dollar over the last year is also a vote of confidence in the country’s near-term prospects.”
Recommended for you
The latest budget papers have outlined a $10 million provision for ASIC greenwashing enforcement activity as well as funds for a sustainable labelling regime to be partially met by industry levies.
Betashares has expanded its fixed income solutions with the launch of a new ETF offering exposure to subordinated bonds issued by the big four Australian banks.
The latest monthly Bank of America global fund manager survey has found investors are starting to shift cash into bonds as cash allocations reach a three-year low.
AUSIEX analysis has discovered the net traded value of Australian dollar fixed income ETFs more than doubled from January to April, reflecting growing investor demand.