Equities lead as Australian managed funds attract $13bn in H1

Australian managed funds attracted $13 billion in net inflows during the first half of 2026, with investors maintaining strong exposure to markets despite heightened geopolitical tensions and domestic economic uncertainty, according to new data from Calastone.

The global funds network said investors added capital in every month except March, when the Reserve Bank of Australia delivered its third consecutive interest rate rise and concerns over conflict and energy supply disruptions in the Middle East weighed sentiment.

Equity funds attracted the largest share of new money over the six months, gathering just over $4 billion in net inflows. Strong buying early in the year saw equity funds attract $1.7 billion in January and $1.15 billion in February before flows stalled in March. Demand recovered in April, although investor appetite softened again through May and June.

Meanwhile, fixed income funds continued it gain favour, attracting $2.7 billion in net inflows across the half. Apart from a brief interruption in March, fixed income funds recorded positive inflows every month as investors sought higher yields, income and portfolio diversification.

Multi-asset strategies remained broadly stable, ending the period with modest net inflows of around $300 million.

Calastone head of Australia and New Zealand Marsha Lee said investor behaviour evolved over the course of the half rather than retreating from markets altogether.

"Australian investors remained committed to markets throughout the first half of 2026, but their allocation decisions clearly evolved," Lee said.

"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."

Lee said one of the defining trends of the period was the narrowing gap between equity and fixed income allocations.

"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," Lee said.