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Australian investors bought into the bear market trap in Q3

Fund Flow Index - Q4 2022

Australian investors greeted the new financial year in significantly more optimistic spirits than they ended the last one, though this optimism faded quickly. Between July and September, investors added A$3.63bn to managed equity funds, up from $605m in the previous quarter, when they had been spooked by the intensifying global bear market.

Key highlights from this quarter's FFI:

  • Managed equity funds enjoyed A$3.53bn of inflows between July and September
  • Australian equities benefited disproportionately from new cash for equity funds with second-largest quarterly inflow in at least four years
  • Active funds and ESG absorbed Q3’s new capital
  • Investor enthusiasm waned as the quarter progressed – outflows by end of September
  • Initial optimism on fixed income funds during bond market rally evaporated as yields soared and prices fell
  • Mixed assets followed the same pattern, but real estate was more resilient