Global equities dominate as local boutiques emerge

Yasmine Raso

Senior Journalist, Financial Newswire

13 July 2023

Equity Trustees’ latest data on the last 100 funds launched in Australia found growing investor sentiment towards global equities and a preference for local fund managers.

Of the last 100 funds released to market in Australia, 53 domestic fund managers and 47 global fund managers launched funds targeting a range of asset classes including global equities (22 per cent), domestic fixed income (19 per cent), domestic equities (15 per cent) and global fixed income (14 per cent).

This was followed by alternatives (seven per cent), domestic real assets (seven per cent), global property securities (five per cent), multi asset (four per cent), venture capital and currencies (both three per cent).

Exchange traded funds (ETFs) also accounted for 12 per cent of funds launched, while

“Domestic equity funds accounted for just 15% of funds launched,” Johnny Francis, General Manager of Business Development and Custody at Equity Trustees, said.

“The next most popular funds were fixed income, with domestic accounting for 19% of funds launched, compared to 15% for global fixed income. These included corporate and government bond funds, asset-backed securities and notes coming to market.

“We also saw several private debt and credit funds being launched. This was clearly a reflection of tightening market conditions spurred by tightening fiscal policy and rising interest rates in response to rising inflation and geopolitical volatility.”

Of the 53 locally based fund managers 35 are based in Sydney accounting for 66 per cent, 16 are based in Melbourne (30 per cent) and two are in Brisbane (four per cent).

Francis said a trend had emerged where boutique managers affiliated with larger organisations were developing more funds. Close to half (47 per cent) of the latest 100 funds were also designed for retail investors, with less than one-third (31 per cent) developed for wholesale investors.

Dilan Ashton, General Manager of Responsible Investing at Equity Trustees, also highlighted that 13 per cent of funds were designed with environmental, social and governance (ESG) themes or the United Nations’ sustainable development goals (SDGs) at its core.

“Generally, in the market, there were record inflows into Responsible Investment offerings, reaching $1.54 trillion in assets under management (AUM), representing 43% of all professionally managed funds,” she said.

“AUM in sustainability-themed investments has more than doubled to $161 billion over the 12 months ending 31 December 2021.”