Australian investors added a net A$13bn to managed funds during the first half of 2026, extending the strong momentum established in 2025 despite heightened global and domestic market volatility, according to the latest fund flow data from Calastone.
Australian managed funds gained capital every month, except for March, which coincided with the Reserve Bank of Australia’s third consecutive rate rise and increasingly cautious domestic outlook amidst escalating concerns over conflict and energy supply in the Middle East. Investors nevertheless appeared to view the risks as temporary, returning as buyers across all major asset classes in April before becoming progressively more selective as the second quarter unfolded, with allocations shifting towards fixed income.
Equity funds regained dominance before optimism turned to caution
Building on the strong recovery seen throughout 2025, equity funds netted just over A$4bn during the first half of 2026, dominating new investor capital flow despite bullish sentiment fading later in the period. Equity funds amassed A$1.7bn in January and A$1.16bn in February before flatlining in March and regaining A$1.6bn in April. From May, risk appetite waned, driving modest outflows despite equity markets remaining resilient.
Fixed income provides consistent support
As equity demand softened towards the end of the period, fixed income delivered a much steadier pattern of investment. Following record inflows during 2025, fixed income funds attracted A$2.7bn of net inflows in the first half of 2026, recording net inflows every month except March as inflation concerns and heightened market uncertainty temporarily interrupted demand.
Demand recovered immediately in April and strengthened further through May and June, reinforcing fixed income’s role as a core portfolio allocation for investors seeking income, attractive yields and diversification.
Multi-asset funds remain broadly stable
Multi-asset funds were broadly stable during the first half of 2026, finishing the period with modest net inflows of around A$0.3bn. Flows fluctuated throughout the period, but investors continued allocating capital to diversified strategies, highlighting their continued preference for diversified and balanced portfolios amid ongoing uncertainty.
Marsha Lee, Head of Australia and New Zealand at Calastone, commented: “Australian investors remained committed to markets throughout the first half of 2026, but their allocation decisions clearly evolved. Equities attracted the largest inflows overall, yet demand softened noticeably towards the end of Q2. At the same time, fixed income delivered steady inflows, suggesting investors were increasingly balancing growth opportunities with dependable income.
“Perhaps the most striking trend was the narrowing gap between equity and fixed income flows. Instead of retreating from the market, investors remained invested and opted for diversification in response to economic and geopolitical risk.”
Notes: Total fund flows reflect all fund segments including fixed income, equity and multi-asset. Flow data represents funds domiciled in Australia and transacted across Calastone’s network. All flow amounts are in A$.
