Australian mum-and-dad investors increasingly favour local shares over US stocks as concerns swell around Trump administration policies, data shows.
The proportion of Australian investors putting their money into US assets fell from 25 per cent in December 2024 to 15 per cent in June, according to a report by trading platform IG Markets.
The figure was at its lowest in 18 months, hinting at concerns about Wall Street volatility after months of tariff announcements, geopolitical tensions and worries about US stagflation - where sticky inflation collides with weak economic growth, giving central bankers headaches.
"The Aussie investor has always traditionally preferred investing locally, and is now showing a stronger tendency to do so," IG market analyst Tony Sycamore told AAP.
Australian investors increased their local portfolio allocation to 62 per cent by June, rising from 55 per cent in December, according to the report titled A Trader's Position that tracked responses of 4350 private traders from Australia, the UK and Singapore.
The S&P/ASX200 is considered a more defensive index which is unlikely deliver the eye-watering growth enjoyed by segments such as US tech, but its losses tend to be more modest during downswings.
"Here in Australia we have very solid stocks, which people are confident in," Mr Sycamore said.
"They see them down at the shopping centre, they're banking names and mining stocks which everybody's familiar with, and that provides a lot of reassurance in volatile times like we saw during the first half of this year."
Adding to local confidence was the Reserve Bank cutting the cash interest rate from 4.35 per cent to 3.6 per cent since February, lowering borrowing costs for businesses and boosting consumer confidence.
"There's more (cuts) to come and with inflation now back within the RBA target band, there's less reason than ever be avoiding the ASX 200," Mr Sycamore said.
Artificial intelligence was identified as the area of highest potential growth, with 47 per cent of investors affirming their confidence in the sector's future.
Investor confidence in a greener future rebounded, with the proportion of Australian traders valuing environmental, social and governance (ESG) factors bouncing to 41 per cent in June 2025, its highest level since December 2023.
Interest in defence sector investments also spiked, up from 25 per cent in December to 42 per cent by June 2025.
Global military spending has continued to to rise in 2025 after surging 9.4 per cent in 2024 to $A4.1 trillion, according to figures from the Stockholm International Peace Research Institute.
The report comes ahead of a portfolio update from Australia's sovereign wealth Future Fund, but its deep pockets mean a similar swing towards the local market is unlikely.
"I'm not expecting it, but if it were to happen, it would certainly be a blow to the US exceptionalism story," Mr Sycamore said.
"You've got to find deep markets to invest in when you have that much funds under management."
