Funds under management (FUM) through net flows increased 2.3%, while the total market decreased by 4.3%, or $29 billion, from $681 billion to $652 billion.
“Measuring net flows allows us to see how the market is reacting across asset classes,products or even across investment managers, without having investment performance skew how we are perceiving demand,” said John Dyall, head of investment research at Rainmaker Information.
“We have found that net flows trail performance by 12 months, so leading performance will experience inflows from investors 12 months later and the same goes for poor performers experiencing outflows."
Of the asset classes, Australian equities large cap had the highest 12-month net flows with $6 billion on final FUM of $102 billion, representing a 6% increase through flows.
Bonds with credit and high yield characteristics had the second highest net inflows with$5.7 billion to $48 billion, an increase of 13% through flows.
“Of the credit products, the top five by inflows all have a lot of direct loans/mortgages in them and account for around 85% of inflows into this sector,”said Dyall.
Diversified products (growth, balanced and capital stable) had the third highest net inflows with $4 billion to FUM of $62 billion.
Alternatives had the largest decrease in percentage terms with a reduction of 7% or $922million. The largest outflows were in international equities large cap, which suffered $3.2 billion in net outflows, equivalent to 2% of FUM.
Of the 154 managers in the Rainmaker database, 92 had net inflows and 62 had net outflows over 12 months. That is, 60% had positive net flows and 40% had negative net flows.
Vanguard had the highest net inflows over 12 months with $10.4 billion (up 8% from flows)
BetaShares, which exclusively manages ETFs, had the second highest inflows with $4.6billion (up 26% from flows).
Of the top 40 managers by net flow increases, Eiger Capital and Airlie Funds Management had the largest increase in net flows on a percentage basis,increasing by 556% and 366% respectively.
The product with the highest net inflow was the Dexus Wholesale Property Fund with$3.3 billion.
“This was primarily the result of the merger between the Dexus fund and the AMP Capital Diversified Property Fund, which added $3.5 billion to the size of the fund,” said Dyall.
The product with the second highest inflow was the Vanguard Australian Shares Index ETF with $2.4 billion for an increase of 27%.
“Interestingly, this was five times the size of net inflows into the unit trust version of this product, the Vanguard Australian Shares Index Fund, which had inflows of $471 million.”
“That fund is $15.9 billion in size, while the ETF is $10.4 billion in size,” said Dyall.
Ord Minnett, Count Financial and Industry Fund Services achieved the largest net growth in their number of financial advisers in 2022.
Investors may make more money if they invest in managed investment products that are in net outflows.