Australia’s stocks shine as global fund managers seek alternatives to US market

Foreign investors have been turning to Australia’s domestically focused stocks, choosing an often overlooked market as a trade-war hideout with a cheap currency and resilient economy.

- ANKUR BANERJEE TOM WESTBROOK

It is hard to quantify just how much capital has gone Down Under, since Australia’s stock exchange does not publish timely flows data. But it has showed up in share registries.

The ASX 200 is among the developed world’s top-performing market benchmarks since Donald Trump's “Liberation Day” tariff announcement on April 2, rising 3.1% and beaten only by Germany's Dax.

The gain in US dollar terms is more than double that if the greenback’s declines over that time are taken into account.

Money is also arriving at a time when global allocators are looking for alternatives to US stocks and shows a relatively unusual bid for domestic-focused companies ahead of the global miners that offshore buyers have historically favoured.

“We have seen an uptick ... in global fund managers trading into Australia,” said Clinton Wong, managing director at UBS in Sydney who oversees Australia and New Zealand equities.

He declined to quantify the flow or describe buyers in detail, but said possible reasons were that Australia is a large and liquid market with a relatively low hit of 10% US tariffs.

“We have many domestic Australian companies that have no export business that run off the strength of the economy. And the economy is strong,” he said.