Retail Investing Metrics Hit Records in Q4, DriveWealth Report Shows

DriveWealth monitors retail investors' activity across its network of partners including Revolut, MoneyLion and Unifimoney.

Q4 of 2020 hit new record highs in account openings, a number of trades and volume traded, as retail investors were still highly engaged in spite of continued Covid-19 pandemic. This is according to a recent survey by US broker-dealer, DriveWealth, LLC.

DriveWealth’s proprietary data monitors investment activity by individual investors across its network of global partners including Revolut, MoneyLion and Unifimoney, among others.

Some of the key Q4 findings show that retail investing finished the year strong, with total accounts up 275% compared to a year earlier, while funded accounts were up 277% over 2019. Taking a quarter-over-quarter perspective, total accounts and funded accounts were up 26% and 22%, in Q4 and Q3, respectively. November was the strongest month in the quarter, increasing 9% over October.

Additionally, DriveWealth reported spikes in accounts opened by investors in the US and EMEA during the week following the election of Joe Biden alongside Pizer and Biontech’s announcement of a COVID-19 vaccine.

The survey finds that investors under 20 years old opened new accounts at the fastest pace, driving a 39% quarterly increase from the third quarter, and 453% versus Q1 of 2020. That significantly outpaced the 56% average increase across all other age groups. The report further states that the largest absolute number of new accounts were opened by investors aged 20-29, followed by those aged 30-39 and then those aged 40-49.

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One notable trend from DriveWealth’s data is that the majority of retail investors on its platform were acting when they have time on the weekends, not during US market hours.

Volumes Also on the Uptick

In terms of asset growth in 2020, DriveWealth reported a 59% jump in assets from Q3, which was driven largely by new accounts from digital wallet investors. On a full-year basis, 2020 saw a 1,015% increase in deposits compared to 2019 figures, fueled by 63% growth in digital wallet assets and 54% rise in traditional brokerage account assets.

According to the other highlights, trading volume rose 40% in the fourth quarter, with December being the biggest volume month of 2020, which was followed closely by November. Both months had record days of activity, fueled by market-moving headlines and exceptional corporate actions. November 9th was a record day as trading soared, which was based on news of the US election outcome, plus Pizer’s announcement of its COVID-19 vaccine.

Commenting on the findings, DriveWealth Founder and CEO, Bob Cortright said: “2020 was an unprecedented year, but it gave rise to the profile of the retail investor that had a significant impact on the markets. Our partners’ customers around the world invested in companies with a global presence such as Amazon, Apple, Microsoft and Tesla. We here at DriveWealth anticipate such trends will only continue in 2021 and beyond as embedded finance continues to evolve and improves the financial lives of millions around the world through affordable access and engagement.”

DriveWealth is already partners with many financial institutions, brokers, app developers and technology companies to provide users with the ability to open a US-based brokerage account and invest in the US equities market. The company’s offering covers six continents, offering its APIs that partners can use to provide new investment capabilities for their clients.

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