Australians, whose cash savings accounts grew sharply over the past couple of years. This excess cash poured into managed funds which hoovered up a whopping $35.7 billion across all asset classes last year. An analysis conducted by global funds network Calastone showed a 162 per cent hike in fund inflows in Australia from a steady $13.6 billion in each of the previous two years.
The firm revealed that with inflows jumping 174 per cent to $15 billion, equities funds were most in demand in 2021. This meant that the value of money placed by investors with share market fund managers last year was three times as much as they did in 2020.
Ross Fox, Calastone head of Asia-Pacific, is of the view that this boon for managed fund providers is correlated with the Australia’s response to the pandemic. “Australians have saved in record amounts during the pandemic, stowing away a seventh of their disposable income in 2020/21,” he said. “They were rather cautious with all this cash in the first year of the pandemic. But by 2021, as a clearer exit route emerged in the form of vaccines, fund flows responded dramatically. The flood of capital into managed funds in 2021 is a direct consequence of both higher risk appetite and piles of ready cash on household balance sheets.”
