Confident investors drive inflows
Resurgent investor confidence drove inflows into managed funds to new heights in 2013, with Australian investors favouring international shares over domestic equities and demonstrating a preference towards indexed vehicles, according to Morningstar's second annual Global Flows Report.
The report said that multi-sector offerings, which invest in a number of sectors and are seen as a one-stop-shop diversified solution, took in the greatest flows in 2013.
Multi-sector strategies took in $17.79 billion of net inflows, the report said, benefiting from a dependable stream of superannuation contributions; therefore their flows are not attributable to active investment decisions.
Double-digit Australian share market returns did not deter investors from shifting $5.79 billion out of Australian share funds as investors looked offshore for growth. This signals concerns amongst fund-holders that the Australian economy can successfully transition away from the resources-led boom which drove the market for the past decade, the report said.
The report said the $847 million net inflow into international equities represented a four-year high for the asset class, following two years of outflows. This was most likely the result of investor concerns over sub-par economic growth and investors repositioning themselves to take advantage of the falling Australian dollar, according to the report.
The Morningstar analysis said that while Australia had historically been slow to adopt indexing relative to the rest of the world, 2013 had marked a notable change in the preference for indexed vehicles, moving closer in line with the global trend towards low-cost passive investment solutions.
The report stated investors demonstrated a clear preference for passive rather than active options, driven largely by increasing awareness among investors of the role of cost in investment outcomes.
AUTHOR
Staff Writer
Money Management staff writers are writers who contribute to the website from time to time. If you would like to discuss the content contained within this article please contact us.
Recommended for you
Ethical super fund Australian Ethical has announced the appointment of Anthony Lane as chief operating officer.
The structural shift towards active ETFs will reshape the asset management industry, according to McKinsey, and financial advisers will be a key group for managers to focus their distribution.
ASIC has warned that practices across the $200 billion private credit market are inconsistent and, in some cases, require serious improvement.
A surge in electricity prices has driven the monthly Consumer Price Index to its highest level in a year, exceeding forecasts.
TOP PERFORMING FUNDS
ACS FIXED INT - AUSTRALIA/GLOBAL BOND
Fund name
3y(%)pa
1
DomaCom DFS Mortgage
225.31 3 y p.a(%)
2
Loftus Peak Global Disruption Fund Hedged
120.73 3 y p.a(%)
3
Global X 21Shares Bitcoin ETF
72.47 3 y p.a(%)
4
Paradice Australian Mid Cap A
69.09 3 y p.a(%)
5
Global X Ultra Long Nasdaq 100 Complex ETF
61.94 3 y p.a(%)
