2023 2H Australia Online Investing Report

Online investor numbers decline at a slower pace amid improved outlook for international shares

• 1.22 million active online investors, down only 5% in H2 2023 compared to -15% in H1 2023
• Reactivated investors increase their allocation to international equities
• Every other investor identifies as novice or advanced beginner, underscoring the critical role of education in supporting participation

5th February 2024, Sydney – Leading financial services industry research firm Investment Trends releases its 29th semi-annual edition of the 2023 2H Australia Online Investing Report. Providing an in-depth analysis of the Australian online investing market, examining the attitudes, needs and product usage of active online investors, this year’s 2H edition highlights:

Active online investor numbers have continued to decline, albeit at a slower rate. There are now 1.22 million active online investors in Australia, down 5% in the past six months. Meanwhile capital gain expectations for Australian equities are steady at +1.3%.

There is evidence that access to international equities has helped strengthen dormant client reactivation (registering an increase from 6% to 8% in the past year) – slowing the decline in investor numbers this reporting period. To support this statement, the report revealed 29% of reactivated online investors hold international shares in their portfolio, up from 25% in May 2023 and 23% in Nov 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,” said Dr Irene Guiamatsia, Head of Research at Investment Trends.

In terms of how online investors perceive their online investing experience, one in two identify as novice or advanced beginner. Taking a further dive into their investment behaviours, three in ten say they most recently invested in small cap stock – where the main trigger is ‘reaching a savings goal’ (29% cite) and, on a median basis, online investors take one week to decide on an investment, irrespective of self-assessed proficiency level.

“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,” concluded Guiamatsia.

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