The greatest number of funds launched lately by independent responsible entity Equity Trustees (EQT) sat in the global fixed income space, according to its research, as offshore players entered the market.
The 100 research covered the characteristics of the last 100 funds launched by the entity.
There were 19 global fixed income funds launched and 13 Australian fixed income funds. A quarter of the ETFs launched sat in fixed income assets.
Fixed income products increased in popularity due to rising interest rates offering better returns and continued investor interest in fixed income ETFs, the firm said.
Compared to 2023, there was a five-point increase in global fixed income launches from 14 to 19, but a six-point decrease in Australian fixed income launches from 19 to 13.
“After a tough period, fixed income has become an attractive asset class again offering attractive yields and diversification benefits,” said Ben Ashton, senior business development manager at EQT.
“Demand for debt strategies and vehicles for alternative assets are higher than we have seen historically. This is largely driven by uncertainty in markets, transition to net zero, attractive yields and an improving backdrop for debt instruments.”
Looking ahead into the next 12 months, the firm highlighted it expects to see increased interest in private credit and private debt funds.
Johnny Francis, general manager of fund services at EQT, said: “There was an increase in private credit and debt funds, with several of these feeding into unregistered wholesale funds.
“Investors have recognised that non-bank lenders and their private credit funds can provide a source of income. The major traditional banks have reduced their overall lending, and these newer fund managers have stepped in to fill the gap and are being welcomed by investors.”
He also flagged managers in the US are particularly looking to launch in Australia to take advantage of the huge number of assets sitting in superannuation. Other offshore managers are returning to Australia after making a temporary exit during the COVID-19 pandemic.
“We are seeing increased interest from offshore fund managers, in particular those from North America keen to access the Australian market.
“Australia continues to be an attractive destination for offshore managers in recent times who are looking to leverage their strategies offshore and tap into the growing superannuation market which is underpinned by a robust governance structure.”
