Money is flowing out of Wall Street, so where is it going?
Investors who are dumping American stocks following US President Donald Trump's global tariff war are turning to the Australian sharemarket as they seek safe havens around the world amid economic volatility.
While the S&P/ASX 200 is down more than 4.5 per cent since Trump's presidential inauguration on January 20, the local bourse has outperformed the major Wall Street indexes since Trump unveiled a wave of tariffs on so-called Liberation Day earlier this month.
Fund managers say Australia has benefited from being relatively insulated from the economic instability, despite being slapped with a baseline 10 per cent tariff, and that the local economy is holding up stronger than anticipated.
Between April 2 and the ASX's close on April 24, the local bourse has lifted 0.43 per cent. Over the same period on Wall Street, the Dow Jones has fallen 5 per cent, the S&P 500 is down 3.3 per cent and the tech-heavy Nasdaq is trading 2.5 per cent lower.
Trump's fast-paced policy changes have unleashed global market chaos over the past month.
The Australian index has see-sawed, recording its steepest one-day fall in five years followed by the biggest one-day rise in two years the following day earlier this month. Global markets, however, rose late last week after Trump said his tariffs on China would come down 'substantially' and that he had 'no intention' of firing US Federal Reserve chairman Jerome Powell.
Ten Cap co-founder and portfolio manager Jun Bei Liu said the turmoil was causing investors to flee the US.
Although the IMF last week downgraded Australia's economic growth forecast for 2025 to 1.6 per cent, down from 2.1 per cent in January, Australia is expected to remain one of the fastest-growing major economies in the developed world this year and next.
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