Australian retail investors have been actively buying into the local sharemarket this week, capitalising on the volatility caused by escalating geopolitical tensions and global market jitters. Despite the S&P/ASX 200 heading for its worst week since 2022, data from Betashares and IRESS reveals a substantial $139.6 million flowed into Australian equities exchange-traded funds (ETFs) in the four days leading up to Thursday. This influx of capital suggests investors are viewing the market downturn as a buying opportunity. Betashares is an Australian investment management company offering a range of ETFs. IRESS is a technology company providing software and information services to the financial services industry.
Notably, nearly 80 per cent of this investment occurred during or after Wednesday’s significant 1.9 per cent drop in the ASX. Investors also used the market disruption to close out bearish positions, with $16.6 million withdrawn from short funds between Tuesday and Thursday, reversing the $5.1 million inflow recorded on Monday. According to Betashares senior investment strategist Cameron Gleeson, investors are showing a preference for Australian equities over global equities amid the risk-off sentiment.
The recent market volatility has also boosted trading volumes, particularly in international equities. Vanguard reported significantly higher trading volumes across its global shares ETFs this week. While there was a $3.7 million outflow in international equities ETFs on Wednesday, investors quickly returned on Thursday, injecting $20.3 million as global sharemarkets rebounded.
Beyond Australian equities, investors have also turned to defensive assets. VanEck’s US treasury bill ETF saw the largest single fund flow, while Global X’s Physical Gold Structured ETF recorded $13 million in inflows. This shift towards defensive assets underscores investors’ attempts to mitigate risk amid ongoing global uncertainty.
