Online trading doubles amid pandemic blues

The COVID-19 pandemic continues to represent a boon to online investment providers with the latest data from Investment Trends pointing to almost a doubling over 12 months.

The latest Investment Trends Online Investing Report reveals an estimated 1.43 million individuals placed one or more trades on listed securities in the 12 months to May, this year, up 14% from December last year and 35% year on year.

Commenting on the data, Investment Trends head of research, Irene Guiamatsia said the pandemic had significantly shifted Australia’s investing landscape throughout 2020 and this had continued through the first half of 2021.

“To put things into perspective, the number of active retail online investors, that is those who bought or sold securities in a 12-month period, has almost doubled compared to pre-pandemic levels, from 750,000 to 1,430,000,” she said.

The Investment Trends analysis suggested that while some believed the surging interest in online investing might be short-lived as lockdown restrictions ease and Australians spend less time indoors in front of computer screens, the Report shows that inflows of first-time investors in the first half of 2021 remains healthy.

“Nationwide, 148,000 new online investors placed their first trade in the past six months alone, compared to 170,000 in the second half of 2020,” it said.

Guiamatsia noted that challenger brands like SelfWealth, Stake, eToro and Superhero are growing their footprint among these first-time investors with sharp pricing, feature rich platforms and mobile-first UX.

Along with rising adoption in equities investing, the Report also revealed growing interest in cryptocurrencies.

It noted that in the last six months, the proportion of online investors who say they hold cryptocurrencies has increased sharply from 8% to 13%, while a further 10% say they intend to start investing in digital currencies over the next 12 months.

“The rapid rise in novel cryptocurrencies like Dogecoin, which valuation surged from $0.01 to $0.68 between January and May 2021, has certainly captured the imagination of many investors, especially Zoomers and Millennials,” said Guiamatsia.

“While there may be concerns about investor exuberance for relatively volatile digital assets, our research shows diversification and long-term investing are investors’ top cited reasons for holding cryptocurrencies – rather than speculative purposes.”