Women make up greater share of new investors, ASX survey shows

Women make up greater share of new investors, ASX survey shows

Photo: Priscilla Du Preez, via Unsplash.

A recent survey by the Australian Stock Exchange (ASX: ASX) has shown positive signs for women becoming investors, and has also uncovered revealing findings such as a greater risk aversion amongst younger investors.

Meanwhile, environment, social and governance (ESG) considerations ranked the lowest of any category for decision making with investments.

The ASX's Australian Investor Study has found that 55 per cent of people who started investing over the past two years were female, although women are still underrepresented overall as 42 per cent of the total investing cohort.

The survey of more than 55,000 Australian adults shows more women than men cite affordability as their primary barrier to investing, which is to be expected given the wage gap, and some 64 per cent of Australians who have never invested are female.

It was also has found that women are far more likely to consult friends and family to make investment decisions (36 per cent, versus 26 per cent for men), and far less likely to consult company annual reports, online broker websites, paid subscription investing websites or the ASX website.

Some 31 per cent of investors based their decisions on ESG considerations, but this was only a top-three priority for 6 per cent of investors surveyed, ranking the lowest out of 15 categories above 'other'. The highest considerations were investment return (42 per cent), investment risk (35 per cent), personal circumstances (33 per cent) and fees (25 per cent).

Of those who traded based on ESG factors over the past year, 52 per cent were next-gen (aged 18 to 24) and 42 per cent were in the category of wealth accumulators (aged 25 to 49).

The youngest category of investors had a higher median trade size than women ($5,259 versus $4,005). Representing 9 per cent of all investors, the youngest adult Australians placed a much greater importance on building a sustainable income stream as the main goal for their investments, with 36 per cent citing this compared to 28 per cent for all investors.

Investors aged 18 to 24 also had the greatest preference for guaranteed returns (28 per cent, compared to 19 per cent for all) and were the least likely to accept moderate variability in returns, at 16 per cent compared to 22 per cent overall.

However, almost one in three within this demographic hold cryptocurrency and their portfolios are the least diversified of all age groups, which leads the ASX to suggest there may be a gap in financial literacy for Gen Z investors, of whom more than half would prefer to learn about investing via YouTube videos.

"Covid created this wave of new retail investors and our own internal analysis saw record trading value from this cohort," says the ASX's general manager for investment products and strategy, Andrew Campion.

"While retail trading value has returned to ‘pre-Covid’ levels, the number of investors holding on-exchange investments continues to steadily grow.

"We will continue to see younger investors enter the market for the first time. This cohort will make up almost 30 per cent of the 1.33 million non-investors that intend to invest in the next 12 months."

Campion emphasises it is important as a financial community to arm new investors with the information they need to make informed investment decisions.

He explains that the research provides an authoritative guide on the evolution of investment markets and investor behaviour.

"“Our latest study has found that the number of investors that hold on-exchange investments has grown from 6.6 million to 7.7 million in 2023 – the highest proportion of on-exchange investors in over a decade. This equates to 38 per cent of Australian adults," he says.

"While Australian shares are still the most popular of all on-exchange investments, exchange traded funds (ETFs) continue to grow in popularity with 20 per cent of investors holding such investments, up from 15 per cent three years ago.

"This growth aligns with ASX’s latest statistics where total ETF funds under management has grown by an astonishing $80 billion from $63.5 billion in May 2020 to $143.5 billion as at the end of May 2023.

"The report also compares holdings of different asset classes and found that there’s been a slight dip in residential property investment (down 4 per cent), but gains in shares and ETFs, suggesting Australians are looking at other ways to build wealth outside of property."

 

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