SINGAPORE (Reuters) – 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.
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 U.S. 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 U.S. 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% U.S. 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.
A Macquarie analysis of quarterly share registry data showed international investors buying even before Trump’s tariffs, scooping up A$800 million in bank stocks – mostly National Australia Bank – over the first quarter of 2025.
That extended into April, according to Macquarie’s own flow figures, the investment bank’s analysts said in a note last month.
“Indeed, our data suggests that offshore investors increased their cumulative net buying of financials by about 23% since ‘Liberation Day,'” they said.
Fund flows have also spiked into Sweden, a bellwether for flows into Europe, and foreigners have been buyers in Japan.
Morgan Stanley last month upgraded its recommended allocation to Australia from underweight to even weight, noting the market’s defensive appeal and increasing its weightings for banks and consumer stocks.
It is not clear exactly which non-financial stocks foreigners have bought, but grocer Coles – insulated against tariffs – is up 18% year-to-date and telecom firm Telstra is up 14% against a flat broader market.
