The number of active retail investors in the first half of 2020 in Australia has surpassed one million for the first time in the country’s history, according to a recent survey from Investment Trends.
Today, Investment Trends has released its 2020 H1 Online Investing Report, which takes a look at retail investors in the online equities and exchange-traded fund (ETF) sectors. During the six month period, the number of active online investors grew by 41 per cent from 750,000 to 1.06 million.
The survey, based on 16,870 investors and traders, showed that higher market volatility driven by the coronavirus pandemic and an increasingly competitive landscape in Australia were the two main driving forces behind the uptick in online retail investors. Furthermore, the survey revealed that responsible investing matters to Aussies.
Investment Trends: Millennials Lead the Way
According to Recep Peker, Research Director at Investment Trends, the solid increase in active online traders was driven by an influx of first-time investors. This is a trend not only limited to the land down under.
“Australia is now home to over one million active online investors who have traded listed investment in the past year, driven largely by a record inflow of 265,000 first-time investors,” Peker said in its statement.
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“First-time investors typically consist of young Australians in the Zoomer or Millennial age group, but the pandemic-induced lockdown has accelerated these trends. This year, the vast majority of first-time investors are under the age of 40 (70%), which represents a significant shift from last year (51%).”
Furthermore, investors were attracted by opportunities that allowed them to invest in smaller amounts.
“Many first-time investors were attracted by buying opportunities presented by the market sell-off earlier this year, while the ability to start investing with small amounts was also a catalyst for many,” Peker added.
ESG Factors Are Increasingly Important for Investors
Another trend observed in the survey was that a significant proportion of online investors are applying ‘Responsible Investing’ principles to their investment decisions. Thus traders are considering the ethical, environmental, social and corporate governance (ESG) factors on their investments.
“There is strong appetite for investments that demonstrate good ESG standards, and the desire for investors to align their investments to their values, goals and aspirations is notable across all age segments,” concluded Peker.