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Nervous investors pulled capital from equity funds in Q1 at fastest rate since pandemic began

Fund Flow Index - Q2 2023

Australian investors pulled more capital out of managed equity funds in the first quarter of 2023 than at any time since the beginning of the pandemic. Outflows reached a net A$516m between January and March, the first quarter to see capital leave equity funds in three years.

Key highlights from this quarter's FFI:

  • Australian investors pulled a net A$516m from managed equity funds in Q1, the worst outflows since Q1 2020 (-A$1.0bn)
  • Uncertainty over outlook for interest rates, inflation and global growth is driving a cycle of market ups and downs – suggesting the bear market has further to run
  • Australian investors structurally favour domestic equities – this was evident in Q1 as domestically focused funds saw inflows while funds investing overseas shed capital
  • Real estate funds suffered first quarterly outflow since Q2 2022
  • Fixed income funds saw inflows in January and February turn to profit-taking in March