Highlights from the 2021 First Half Australia Trading Behaviour Survey

Highlights from the
2021 First Half Australia
Trading Behaviour Survey

Thank you
Thank you again for taking part in our 2021 First Half Australia Trading
Behaviour Survey.

As we navigate these uncertain times, your participation continues to
provide valuable insights, helping service providers better understand
your preferences and investing needs. An important goal for us,
and service providers who support this survey, is to translate these
insights into better services and outcomes for you.

This short report gathers some of the most interesting results from the
research. I hope you find it as fascinating and insightful as we did.

Yours sincerely,

Mark Johnston
Executive Chairman and Founder
Investment Trends
23.02 Tower 3, International Towers
300 Barangaroo Ave,
Sydney NSW 2000
Australia

Table of contents

Methodology and scope ................................................................................. 4.
Total number of investors.............................................................................. 5.
Average return expectations ......................................................................... 6.
Changing current situation ............................................................................ 7.
Prompts to start investing ............................................................................. 8.
Prompts to resume trading ........................................................................... 9.
Educational content ..................................................................................... 10.
Encouraging the next wave .........................................................................11.
Cryptocurrency...............................................................................................12.
About Investment Trends ............................................................................13.

Methodology and scope
The 2021 First Half Australia Trading Behaviour Survey examines the
attitudes and behaviours of online share investors in detail. The findings in
this pack are based on a quantitative online survey conducted
between March and April 2021.

A total of 19,453 valid responses were received after data cleaning, of
which 13,948 placed an equities trade online in the preceding 12 months.
The maximum sampling error (centre of the range) at the 95% confidence
interval for this online investor sample is +/-0.8%. It must be noted that
analysis of smaller subgroups would have a higher sampling error.

This is our twenty-fourth bi-annual edition of this report. Investment
Trends has researched the     Australian   Online  Investing    market
continuously since 2008.

Total number of investors
The number of active online investors has continued
to grow in the last six months

As of May 2021, we estimate 1.43 million unique individuals placed at least
one online trade in listed securities in the preceding 12 months, up 12%
from December (1.25 million) and 35% year on year.

This growth continues to be supported by the ongoing participation of
existing investors and inflows of new-to-market and reactivated investors.

Average return expectations
   Optimism about Australian equities has slowed, but
             remains in positive territory

We track Australian investor sentiment by looking at their capital gain
expectations from the All Ordinaries Index over the coming 12 months
(excluding dividends).

In May 2021, online investors expected the Australian stock market to
grow by 3.3% in the year ahead, on average. This is
a decrease from 5.7% only     six   months   prior in December 2020,
but markedly higher that the RBA cash rate.

COVID 19 retrospective
 Online investors have seen an increase in their savings
      and cash flow as a result of the lockdowns

For 50 percent of online investors, the pandemic has had a positive impact
on their savings, while one in three say they experienced an increase in
cash flow.

Mental well-being has taken a hit, with close to one in four (23%) online
investors reporting a worsening of their personal condition.

Prompts to start investing
New investors are attracted by the ability to invest small
amounts and the desire to learn a new skill

The factors prompting Australians to place their very first trade in the first
half of 2021 are similar to what prompted them in the second half
of 2020.
The main catalysts were the ability to invest with small amounts of
money (46% cite this) and a desire to learn a new skill (44%), with the low-
rate environment (32%) rounding out the top three.
Consistent with relative stable market conditions at the time of the study,
fewer new-to-market        investors    mention COVID-induced         market
volatility as a prompt to start (22%, down from 36% in Dec 2020).

Prompts to resume trading
   The ability to invest small amounts has also been a
             significant driver of reactivation
           Similar to new online investors, previously dormant
 investors who returned to online investing in the first half of 2021 most
  often mention the ability to invest small amounts of money as the key
                                   driver.

Having more time (26%), the low interest rate environment (25%) and
market outlook (25%) all had similar importance in driving reactivation.
Tax optimisation benefits are often a popular incentive to reactivate in the
lead to EOFY (18%, up from 5% in December 2020).

Educational content
     Younger investors turn to ASX, social media, and
   educational websites to fill informational gaps, while
   older investors are more likely to trust their platform

Online investing platforms are faced with the challenge of retaining new-
to-market and established investors who are hungry for education and
decision support material. However, different age groups turn to different
sources for their information needs.

Zoomers and millennials are more likely than older investors to trust the
ASX, educational websites or social media influencers for investing-
related content. In contrast, almost two-fifths of retirees and pre-
retirees trust the content delivered by their trading platform.

Cryptocurrencies
Fully one in five online investors believe cryptocurrencies
will deliver better returns than equities or property over the
next year

Australian investors are more bullish on international equities (31%) than
ASX-listed names (26%).

One in five online investors believe that cryptocurrency will outperform
equities and property in the next 12 months. Zoomers (37%) and
millennials      (29%) and       are      more      likely than     older
investors to hold this view.

About Investment Trends

Investment Trends is a specialist financial services market research
organisation providing business insights and decision support information
to many of the world’s leading financial services organisations. We
combine analytical rigour and strategic thinking with the most advanced
market research and statistical techniques to help our clients gain
competitive advantage. As a company we aim to improve the lives of
millions of investors by making the whole financial services industry
better.
Our research coverage spans eight countries across Australia, Asia,
Europe and the US.
Our work is focused on helping clients answer three fundamental
questions:
      1.    How does the market currently work?
      2.    How is the market evolving?
      3.    How do I improve business outcomes:
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            o    Develop the products investors want
            o    Introduce tools and services necessary to enhance the
            customer experience
            o    Use technology to engage and support investors

Our clients include industry regulators, leading local and global banks,
investment platforms, leverage trading providers, fund managers,
superannuation and pension funds, product issuers and manufacturers
and financial planning software providers.

Investment Trends Pty Ltd
                                       23.02 Tower 3, International Towers
                                                    300 Barangaroo Ave,
                                                        Sydney NSW 2000
                                                                  Australia

                                                  Phone: +61 2 8248 8000
                                             sales@investmenttrends.com
                                               www.investmenttrends.com

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Australia Trading Behaviour Survey”) contains proprietary information
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