Women, Gen Z fastest growing investor bases in Australia
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Women are surging into investing, making up almost half of people who began in the last 12 months, as is Gen Z.
Forty-five per cent of those who began investing in the last 12 months were women, up from 31 per cent among those who started five to 10 years ago, according to the ASX’s Australian Investor Study 2020.
Among people who intend to start investing, women make up 51 per cent, but they also hold fewer assets with less diversification and are more risk averse than men.
“Women are also more inclined to set a strategy and hold to it, reviewing their portfolios less often and making fewer changes in response to market movements,” the study said.
“While this considered approach may help female investors avoid losses in times of crisis, it may also prevent them from taking advantage of emerging opportunities.”
Almost half of all Australian adults have an investment outside their superannuation and their home.
One third of Australian adults have a listed investment and almost a quarter began investing only in the last two years.
The other change was demographic.
Stockhead has been covering the rise of the millennial investor since the ASX’s last investor study in 2017.
Back then, the report suggested younger investors were turning to stocks instead of, or in order to, buy property.
Today, these people are the wealth accumulators and the ‘next generation’ are 18-24 year olds, who make up 10 per cent of investors in Australia.
“The last two years have seen an influx of younger investors into the market. Among those who began investing on a securities exchange within the last two years, a quarter are next generation investors,” the report said.
“This trend looks set to continue, with 27 per cent of intending investors (those planning to begin investing within 12 months) also under 25.
“Characterised by distinctive investment preferences and behaviours that distinguish them from their older peers, next generation investors … are comparatively risk averse, they have tended to focus on generating a reliable income stream – at least until the COVID-19 induced market plunge led to a new emphasis on capital growth.”
Interestingly, next generation investors are most likely to focus on income, with the report suggesting this reflects the idea that home ownership is undesirable or increasingly unachievable.
Today, one in five investors use digital investment platforms such as micro-saving apps which provide an accessible entry point for those who are motivated to begin investing, but are unsure where to begin and who only have a little to invest.
“Their usage looks set to increase, with 31 per cent of intending investors saying they plan to use them, including 22 per cent who plan to do so within the next 12 months,” the ASX report said.
The report suggested that while ASIC is concerned about investors responding to the COVID-related market volatility by speculating on stocks, its research also indicates that a significant proportion of investors have been building their portfolios with more long-term goals in mind.
“Overall, investors were more likely to increase their holdings of growth assets like shares, rather than reduce them… That suggests very few investors have sold into a declining market, crystallising their losses, with many viewing market volatility as a buying opportunity,” the report said.