More Australian women than ever are investing in build their wealth: 2019 2H Online Broking Report

From
Recep Peker

Peker Recep

International Women’s Day 2020 coincides with the release of the latest Investment Trends research of Australian online investors – the 2019 2H Online Broking Report – so there is no better time to look at key trends in the retail investing space from the perspective of women investors.

Key highlights

  • More Australian women than ever are investing to build their wealth
  • There is a strong desire among women investors to learn and further educate themselves
  • Interest to access overseas investments and ESG-centric products is growing at pace

More Australian women than ever are investing to build their wealth

The latest research shows that women still make up only 18% of the 750,000 active online investors across Australia. But the good news is this gap is closing.

“In recent years – and particularly through 2019 – the proportion of Australian women who began investing for the very first time grew substantially to 28% of that cohort, more than double the rate observed five plus years ago,” said Recep Peker, Research Director at Investment Trends

“While more work needs to be done to lift the ratio of women investors, Australia is substantially ahead of established markets such as the UK (11% women, 89% male) and is within touching distance of the US (21% women, 79% male),” added Peker.

 

 

There is a strong desire among women investors to learn and further educate themselves

For women, knowledge and education are central to their investment journey, and Investment Trends’ research shows that women who invest have a strong desire to expand their knowledge and further educate themselves on investments and investing.

“Similar to their male counterparts, women most often rely on their own personal research and company-produced reports as a foundation for making investment decisions, but they are substantially more likely to collaborate and discuss ideas with their friends and family members (37% cite this vs 28% for males),” said Peker.

“Women are also somewhat more likely to seek out the views of prominent investors and commentators (24% vs 22%), listen to investment-related podcasts (19% vs 17%), and rely on investment-related online forums and blogs, with the Barefoot Investor a firm favourite (accessed by 36% of women investors vs 19% of males),” added Peker.

The same is true for women who want to begin their investing journey in the next 12 months. This group – to a vastly higher extent than men – want to start by investing small amounts of money (52% vs 33%). And they are significantly more likely than men to want education, a good understanding of how to manage risk and the ability to share and learn from the experience of others.

“It is no coincidence, then, that both in Australia and globally, women investors have increasingly embraced low entry cost products with ETFs at their core, such as microsavings apps and robo-advice services,” said Peker.

Interest to access overseas investments and ESG-centric products is growing at pace

Two emerging trends across the Australian investor population is the growing demand to invest in international markets and ESG investing.

Currently, over half of online investors say they invest in international assets in some shape or form, a proportion that is roughly similar across gender lines (50% for women and 55% for men). But the propensity to add overseas investments in their portfolio is strongly linked to their investing experience – the longer a person has been investing in the markets, the more likely they are to seek exposure to investments outside Australia.

“Where our research shows a gender differential for overseas investing is in the investment vehicles used for overseas exposure. Women are more likely than men to access international exposure through ETFs (55% vs 49%) instead of direct equities (36% vs 46%). Clearly, the core benefits of ETFs – low cost, easy access to a diversified portfolio – resonate strongly with women irrespective of the fund’s underlying exposure,” commented Peker.

On the ESG front, more than a third of Australian investors (36%) now say they have or will use ESG factors when selecting their investments. While men and women report this in equal proportions, women across every age group place greater emphasis on ethical, socially responsible and environmentally responsible factors (see chart 2). But once again, women investors are almost twice as likely to feel they don’t know enough about Responsible Investing to get started (22% vs 12%).

“Service providers and product manufacturers can make a positive difference by helping women align their investments to their values, goals and aspirations. But to do this, they must deliver the products and tools to help start the investment journey and deepen the investing journey,” said Peker.

“The theme of this year’s International Women’s Day is “Let’s all be each for equal’’, and financial equality remains central to this goal. It is crucial that the wealth management industry continues to empower women from all walks of life to take control of their financial wellbeing – young or old, wealthy or financially-challenged, self-reliant or requiring financial advice.”

 

 

About the report

The Investment Trends 2019 2H Australian Online Broking Report is an in-depth analysis of active online investors in Australia, examining their investing behaviour, attitudes and product usage.

 

This Report is based on a survey of 13,161 investors and traders, making it the largest and most comprehensive independent study of the online stockbroking industry in Australia.

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