Retail investment into equities increased by 100 per cent during the Covid-19 pandemic according to researcher Investment Trends, with an estimated 1.43 million Australians placing one or more trades into listed securities in the 12 months to May 2021.
Investment Trends head of research Irene Guiamatsia says the shift started in early 2020 and has 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,” Guiamatsia says.
Even when the lockdowns eased during late 2020 and early 2021, and people spent less time on screens, the report shows that fist-time investor inflows remained healthy; 148,000 new online investors placed their maiden trade in the past six months alone, compared to 170,000 in the second half of 2020.
“It’s encouraging to see so many Australians starting their investing journey,” said Guiamatsia. “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.”
The report also highlighted a growing interest in cryptocurrencies, with the proportion of online investors who say they hold cryptocurrency holdings increasing “sharply” from 8 per cent to 13 per cent in the last six months and a further ten per cent saying they intend to invest 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,” Guiamatsia said.
“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.”