Australian investor appetite cooled markedly in the first quarter of 2022, our latest quarterly Fund Flow Index shows. Following record inflows to managed equity funds in 2021, the value of new cash investors committed between January and March 2022 plunged to A$1.2bn, down by more than two thirds from a quarterly average of A$3.8bn last year.
Key highlights from this quarter's FFI:
- Australian investors sharply cut their managed fund subscriptions in Q1 – equity fund inflows fell two thirds compared to the average flow in 2021, down to A$1.2bn
- Each month was well below average, though February was the weakest month
- Australians cut their overseas investments by much more (-80% qoq) than their domestically focused ones (-25%)
- ESG equity fund investments exceeded non-ESG for the first time in Q1 2022
- Fixed income fund inflows slowed to a trickle in Q1 and went negative in March – bonds are sensitive to rising inflation; lower buying activity was the main driver of the trend
- A buyers’ strike hit demand for real estate funds too