Dr Irene Guiamatsia
Leading research firm Investment Trends has launched its 2020 2H Online Investing Report, an in-depth study of the attitudes and preferences of online equities and ETF investors in Australia.
At the end of 2020, the population of active retail online investors in Australia reached a new high of 1.25 million. Over the last 12 months alone, 435,000 Australians began trading listed investments for the very first time amidst the pandemic-induced lockdown.
“Young Australians are increasingly embracing investing, with one in six first-time investors under the age of 25,” said Irene Guiamatsia, Head of Research at Investment Trends.
“COVID-induced market volatility and a low interest rate environment were important prompts for first-time investors entering the market, but even more prominent was the desire to learn a new skill, highlighting how many Australians chose to spend their free time during the lockdowns.”
The record growth in investor numbers is also driven by strong interest for international stocks, with the number of active international share traders in Australia doubling from 54,000 to 109,000 in the 12 months to December 2020.
“The spectacular recovery witnessed by US stocks in the second half of 2020 has captured the attention of a global audience, prompting many Australians to consider investing beyond local equities. A greater choice of investment platforms has been a key driver for uptake, with recent new entrants giving investors more choice than ever,” said Guiamatsia.
As new, inexperienced investors enter the market en masse, investing platforms face a significant challenge of providing education at scale. Besides lower fees, the areas that investors most often seek additional support from their main investing platform are education about strategies for the current environment (27%) and daily newsletters (20%).
“Too many times we’ve heard stories of investors getting caught up in FOMO, making rash short-sighted investing decisions. But our research highlights that investors are hungry for knowledge, resources and tools to help them build long-term wealth. Investment platforms that effectively support their clients on their investment journey will stand out,” explained Guiamatsia.
About the report
The Investment Trends 2020 2H Australia Online Investing Report provides a detailed analysis of the Australian online investing market, examining the attitudes, needs and product usage of active online investors.
Based on a survey of 18,731 investors and traders, the Report is the largest and most comprehensive independent study of the retail online investing market in Australia.