Online investor numbers decline amid int. equities rejuvenation

The latest edition of Investment Trends’ Australia Online Investing Report for the second half of 2023 found that online investor numbers are falling slower, as a preference for international equities spark client reactivations.

The 29^th edition of the report showed 1.22 million active online investors in Australia, down only five per cent in the last six months compared to a fall of 15 per cent in the first half of 2023.

It also highlighted a case for international equities as the driving force behind dormant client reactivation, as in investor clients who had resumed their trading activity, with a two per cent increase from six to eight per cent in the past year.

Just under 30 per cent of reactivated online investors hold international shares in their portfolio, an increase from 25 per cent in May 2023 and 23 per cent in November 2022.

“Dormancy has significantly eased compared to six months ago yet remains high. Inflows of new-to-market online investors continue to dwindle while client reactivation is strong and consistent with levels registered since May 2021,” Dr Irene Guiamatsia, Head of Research at Investment Trends, said.

The number of online investors that ceased their trading activities has also declined by nine per cent from a three-year high in May 2023 to November 2023.

According to Investment Trends, half of polled online investors identified as a “novice or advanced beginner”, 30 per cent said they most recently invested in a small-cap stock and 29 per cent said their main goal is to “reach a savings goal”.

Investment Trends said the report indicates the areas where online investors require the most support to make better financial decisions.

“This insight underscores the pivotal role of education in fostering online investing participation. As to how brokers can best support their clients, personalised content (44%), in-depth research on individual companies (43%), and analysis of small and mid-cap companies (38%) emerged as standout priorities,” Guiamatsia said.