Aussie investors lean into volatility with $8.6bn managed fund flows
Australian investors have made “extraordinary” flows into managed funds since the start of the year, more than 20 times the same period a year ago.
The latest Calastone flows data shows Australian investors added $8.6 billion to managed funds between January and May 2025 compared to just $380 million in the prior corresponding period.
Bond funds have been the clear winners with flows of $4.1 billion, while equity ones gained $1.2 billion and $1 billion went into multi-asset.
Calastone noted Australian investors “leaned into” volatility caused by the Trump tariff fallout in April and added $3.1 billion to managed funds during the month. This marked the highest total net allocation since July 2024.
Calastone noted the actions by Australian investors were the opposite of those investors in Asia who reported their lowest monthly net inflows during April.
However, it was not the case that flows were consistent during the whole five-month period as February saw Australia-domiciled equity funds lose $800 million and multi-asset funds lose $180 million. Meanwhile, bonds saw zero flows during March as high volumes of subscriptions countered redemptions ahead of Trump’s Liberation Day on 2 April.
The year-to-date flows are a marked improvement from flows during January–May 2024, when equity and multi-asset funds saw outflows and poor performance. Some $3.1 billion was lost from equity funds over the five-month period, while multi-assets ones lost $1.6 billion.
Marsha Lee, head of Australia and New Zealand at Calastone, said: “What’s interesting is how relatively insulated Australia has been from the Trump tariff fallout, with April net inflows rivalling record highs. The notable drop in investment during February was largely equities-led as uncertainty brewed and US exceptionalism faded. Demand for bonds also remained quite soft as central banks delayed rate cuts, sending yields higher. Investors, however, have been duly rewarded for leaning into the volatility as equity and bond markets normalised.
“Australian investors appear to be cautiously rotating back into equities while scaling down their reliance on bonds – a stark contrast to the flight-to-safety we saw throughout 2024. This is likely driving a strong comeback for multi-asset funds, which appear to be regaining their footing after extended and unusual periods of high correlation between bonds and stocks due to post-COVID stimulus and low rates. With bond yields normalising, offering diversification benefits, we could see 60/40 funds re-emerge from the wilderness.”
AUTHOR
Laura Dew
Recommended for you
At least two-thirds of ETF flows are understood to be driven by intermediaries, according to Global X, as net flows into Australian ETFs spike 97 per cent in the first half of 2025.
Inflows for the first half of 2025 for GQG Partners stand at US$8 billion, but the firm has flagged fund underperformance could be a headwind for future flows.
BlackRock has announced its plan to acquire real estate investment firm ElmTree Funds which will be integrated into its new private financing solutions business.
With share price growth of 45 per cent for FY25, Australian Ethical has shared why it believes the firm has done so well compared to its active peers.
