Surge in online investing driven by young investors and bullish sentiment

Investment Trends has released the 30th semi-annual edition of its 2024 Australia First Half Online Investing Report, revealing critical insights into the evolving landscape of online investing and identifying significant trends and opportunities for both investors and online brokers.

The report shows participation in online investing has surged to 1.28 million active investors in the first half of 2024, reflecting a growth from 1.22 million in the previous six months. This surge is predominantly driven by younger investors starting their online investing journey, particularly those aged 18-24, known as Zoomers.

This demographic now constitutes close to one-third of new online investors, significantly impacting market dynamics. These new participants were often prompted to start investing online by the ability to invest small amounts of money and access investment-related education.

“The latest wave of new online investors is markedly younger” said Yiğit Günhan, Senior Analyst at Investment Trends. “Their participation reveals a sustained interest driven by accessible investment opportunities and educational resources. This influx is reshaping the landscape, indicating a prime opportunity for online brokers to attract and retain this demographic.”

The report highlights that investor sentiment towards equities has seen a marked improvement over the past six months. This positive shift extends to cryptocurrencies, where the outlook has quickly turned favourable. All investor segments – new, dormant, and reactivated – have shown a more optimistic view of the market, particularly for international shares compared to domestic equities. The results show that online investors expect, on average, a 5.3% return from domestic equities, and 6.1% return from international equities over the next year.

“The renewed optimism in the market is a testament to the resilience and adaptability of online investors. Our data shows a notable increase in confidence towards both domestic and international equities, signaling a broader readiness to embrace diverse investment opportunities,” observed Günhan. “For online brokers, this optimism underscores the importance of providing a diverse range of investment options and transparent, competitive pricing to capture investor interest.”

The report also shows that the number of active international share investors has grown to 152,000, representing 12% of the active online investor population. This segment’s growth highlights a significant interest in global equities as investors now allocate an average of 8% of their portfolios to international equities, up from 7% in the previous period. They most often choose their international broker based on brokerage/fees (50% cite), platform features/usability (32%), and fee transparency (23%).

“The rise in international online share investing is a clear indication of investors’ growing appetite for global exposure” added Günhan. “These investors are notably more cost-sensitive, seeking not only lower fees but also transparent pricing and an easy-to-use platform.”

The report highlights that as the market continues to evolve, online brokers must innovate in product offerings, user experience, and educational initiatives to meet the dynamic needs of the changing online investors. The report underscores a significant opportunity for brokers that can address these evolving demands effectively.

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 About the report:  

The Investment Trends 2024 Australia First Half Online Investing Report provides a detailed analysis of the Australian online investing market, examining the attitudes, needs and product usage of active online investors. The 2024 H1 Online Investing Report is based on a survey conducted by Investment Trends from April to May 2024, capturing responses from 13,764 participants, including 9,315 current online investors, the Report is the largest and most comprehensive independent study of the retail online investing market in Australia.

About Investment Trends:  

Investment Trends is the leading researcher in the retail online share dealing and leveraged trading markets globally. We combine our analytical rigour and strategic thinking with the most advanced research and statistical techniques to help our clients gain competitive advantage. We have over 20 years’ experience in researching the retail wealth management and global broking markets from which we provide new insights and decision-making support to over 130 leading financial service businesses globally. Investment Trends’ clients include several global banking organisations, all major online brokers and CFD providers as well as industry regulators, advice providers, fund managers, super funds, investment platform providers, and industry associations.