Australian fixed income investment leaps five-fold: Calastone
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The news: The last 12 months saw massive sentiment shifts across the global managed funds sector, according to Calastone’s 2023 Global Fund Flows report.
The numbers: The report, which examines the movement of investor capital across its global network of unlisted managed funds and distribution platforms, found that Australian investment in fixed income funds grew five-fold in 2023 to USD3.1 billion ($4.8 billion).
Meanwhile, equity funds continued to see outflows with Australians turning net sellers for the first time since 2019, redeeming USD724 million in 2023.
Sentiment turned sharply from ESG equity funds, which shed over USD10 billion globally last year. Australians redeemed USD292 million from ESG equity funds compared to USD425 million from a much larger market of non-ESG funds.
Elsewhere Calastone found that passive equity funds are back in favour, attracting USD20.1 billion inflows globally during 2023, over which time active equity funds shed USD27.2 billion.
The context: Calastone attributed heightened investment appetite in fixed income funds to the promise of higher yields and favourable capital appreciation outlook globally.
Outflows in equity funds were helped along by the AI-fuelled tech rally losing steam through the year and bond markets beginning to price in rate cuts.
Global concerns over greenwashing and a growing awareness that ESG offerings don't always meet the values and concerns of all investors saw non-ESG funds attract more capital.
Increased investor demand for faster and more modern investment experiences — with reduced friction, time, risk and cost — boosted the uplift in passive funds.
Global funds network Calastone analysed hundreds of millions of buy and sell orders from 2019 and 2023, tracking monies from IFAs, platforms and managed fund institutions as they flow into and out of investment funds.
The source: Calastone 2023 Global Fund Flows Report
