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Lockdown nerves cool Australian appetite for domestic equity funds

Fund Flow Index - July 2021

Australian investors cooled their appetite for equity funds in the second quarter, after six months of record buying. Between April and June, inflows to equity funds fell by a fifth (-19.7%) compared to the first quarter of the year and were more than two fifths lower than the net amount of capital added in the fourth quarter.

Key highlights from this quarter's FFI:

  • Equity fund inflows down almost 20% in Q2 from Q1
  • Q2 follows six months of record buying and inflows to equities were still a very healthy A$2.4bn
  • Initially, the slowdown in buying affected funds focused on overseas equities, but the picture changed as the quarter progressed
  • By the end of Q2, appetite for Australian assets (both property and equity) had dropped markedly, while lower risk bonds rose in favour
  • Australian Equities buying lost momentum throughout Q2 as Covid-19 Delta infections rose