‘Local fundamentals’ see uplift as investors shed US exposure

The latest edition of Investment Trends’ online investing report has found a “marked” shift in investor sentiment as ongoing geopolitical tensions and trade uncertainty continues to impact markets.

The 32nd First Half Australia Online Investing Report found that while confidence in the performance of US equities had declined and the ‘intention to buy’ Australian equities was sitting at more than double that of their US counterparts, investor intentions were still net positive.

The data indicated investors had also returned to “local fundamentals” to boost confidence in and stability of portfolios.

“We’re seeing a recalibration in how investors approach global markets,” Yiğit Günhan, Senior Analyst at Investment Trends, said.

“Investors aren’t rushing to exit international markets, but they are becoming more selective, with domestic equities standing out as the
comparatively more stable option.”

The research also found that the number of active online investors saw a two per cent rise compared to the same period six months ago, from 1.33 million in November 2024 to 1.36 million in May this year. However, this was mainly attributed to previously dormant investors who resumed trading in the last half of the year to “buy the dip”, with a heavy reduction recorded in the number of new investor activity online.

The report said there were just 52,000 new online investors or four per cent, its lowest point recorded since COVID-19 levels.

“We’re seeing a more conviction-driven online investor base take shape,” Günhan said.

“Reactivations suggest that dormant investors are returning with purpose, while the slowdown in new entrants signals an opportunity, and responsibility, for platforms to provide clearer guidance and support in a more uncertain environment.”

The research also indicated 13 per cent of online investors held accounts for the purposes of funding education, building wealth and developing financial literacy for their children.

Artificial intelligence (AI) has also worked its way into online investors’ toolkits, with 15 per cent leveraging the technology for “education and market analysis” most commonly. This comes despite trust and transparency issues cited as barriers for other investors to use it also.

“Whether investors are opening accounts for their children or exploring AI tools, they’re looking for platforms that do more than execute trades,” Günhan said.

“They’re looking for platforms that can support education, embed good habits early, and evolve with the next
generation of investors. AI tools will play a key role, but only if they’re transparent, trusted, and built for learning.”