Digital attention during coronavirus market volatility
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Digital attention during
coronavirus market volatility
Vanguard Research Note | August 2020
■ Turbulence for investors was a ■ Investors appear to use specific ■ Digital attention already was on
hallmark of the first quarter of digital channels for different tasks. the rise in 2020 but market
2020. Market highs were quickly Investors’ device preferences volatility further fueled the
followed by significant drops. did not seem to change during increase.
the quarter.
In the first quarter of 2020, global markets experienced Then, if they have visited the website, we look at what
unusual market volatility. During the quarter, outbreaks of activities investors have engaged in online and how that
the novel coronavirus grew into a global pandemic. U.S. has changed with increased market volatility.
markets reached a peak on February 19, 2020, as
measured by the Standard & Poor’s 500 Index, and Our study uses a representative sample of 17,000
subsequently fell 34%, bottoming out on March 23, 2020. self-directed, web-registered investors with balances
Research shows that market conditions influence since December 31, 2017.2 We refer to these as
investors’ digital attention and trading behavior.1 continuous investors. While all clients in the study sample
As this paper goes into production, markets have have the ability to log on (i.e., are web-registered), not
largely rebounded. everyone does. In the first quarter of 2020, 64% of our
study sample visited the Vanguard website or mobile app
This research note examines changes in digital attention at least once, compared with 61% during the first quarter
and online behavior among Vanguard U.S. retail investors of 2019.
during the first quarter of 2020. Today, the vast majority
of Vanguard investor contacts are online. We begin by
looking at how often investors visited the Vanguard U.S.
website or mobile app before and after February 19.
1 See the 2020 Vanguard research note U.S. Household Trading: Coronavirus Market Volatility, available at vanguard.com. Also see Sicherman, Nachum, George Loewenstein,
Duane J. Seppi, Stephen P. Utkus, 2016. Financial Attention, The Review of Financial Studies, 29(4): 863–897, available at https://doi.org/10.1093/rfs/hhv073.
2 As of December 31, 2019, the median investor in our study sample was 55 years old, with account tenure of 16 years, with one account and two holdings. The median
account balance was $79,000.We compare digital attention, measured by the number little change in attention on weekends or days when the The March-over-March period saw the largest increase, We can also measure attention by the average daily
of daily visits3 to the Vanguard website or mobile app, in market is closed. Instead, we see “ramp-ups” in 44%. However, changes in attention varied week to number of investors who visit the Vanguard website or
the pre-peak period (January 1 to February 19) with that attention on Mondays. week. For example, attention increased by almost 70% mobile app. Overall, patterns for the longer pre- and post-
of the post-peak period (February 20 to March 31) for for March 23–27, 2020, compared with the peak periods are similar to the number of daily visits,
2020. We use the first quarter of 2019, adjusted for the For the pre- versus post-peak periods in 2020, the corresponding week in 2019.5 although changes are more muted because the same
day of the week,4 as a benchmark (see Figure 1). average number of daily visits increased by 10% (see clients are logging on multiple times on the same day.
Figure 2). In 2019, daily visits declined by 1% during the Only 8% of retail investors visited the Vanguard website
During the pre-peak period, digital attention in 2020 was same timeframe. Year over year, attention increased by or mobile app on any given day.
already higher than during the same time in 2019 as the 38% in the post-peak period (compared with 24% in the
market was rising. Attention increased even more during pre-peak period).
the market volatility that resulted from the coronavirus Figure 2. Average daily visits during the first quarter of 2019 and 2020
pandemic. Spikes in daily visits align with large changes
in the S&P 500 daily close. Digital attention was cyclical Representative sample of 17,000 continuous Vanguard U.S. self-directed retail investors
across the week. Between 2019 and 2020, there is very
Visits Proportion of clients
Figure 1. Number of daily visits in the first quarter of 2019 and 2020 2019 2020 % change 2019 2020 % change
Representative sample of 17,000 continuous Vanguard U.S. self-directed retail investors January 1,735 2,142 23% 6.8% 7.8% 15%
Pre-peak
January February March
period February 1-19 1,632 2,037 25 6.6 7.4 12
4,000
February 20-29 1,774 2,176 23 7.0 7.8 11
Post-peak
period March 1,635 2,358 44 6.3 8.1 29
Number
of visits
Pre-peak period 1,696 2,102 24 6.7 7.6 13
Post-peak period 1,671 2,313 38 6.5 8.1 25
0
Note: Data for the first quarter of 2019 are shifted by one day to adjust for day of the week.
Vertical lines indicate Mondays High market volatility
15% Source: Vanguard, 2020.
Change in S&P 500
daily close
0%
-15%
2020 2020 linear trend 2019 2019 linear trend
Note: Data for the first quarter of 2019 are shifted by one day to adjust for day of the week.
Source: Vanguard, 2020.
January February March
200%
number of visits
Normalized
0%
Vertical lines indicate Mondays High market volatility
15%
Change in S&P 500
daily close
0%
-15%
Desktop Mobile app Mobile browser
Desktop
3 Each unique visit linear trend
is counted. For example,Mobile app linear
if an investor trend
visits Mobileand
in the morning browser linear again
then visits trend in the afternoon, that equates to two visits.
5 March over March, logins to the Vanguard website or mobile app increased by 64% for all retail clients. Our sample is biased toward more tenured investors. New
2 4 Data for the first quarter of 2019 are shifted by one day to adjust for the day of the week and its impact on attention. investors—those with less than three months of tenure—log in more frequently. 3We compare digital attention, measured by the number little change in attention on weekends or days when the The March-over-March period saw the largest increase, We can also measure attention by the average daily
of daily visits3 to the Vanguard website or mobile app, in market is closed. Instead, we see “ramp-ups” in 44%. However, changes in attention varied week to number of investors who visit the Vanguard website or
the pre-peak period (January 1 to February 19) with that attention on Mondays. week. For example, attention increased by almost 70% mobile app. Overall, patterns for the longer pre- and post-
of the post-peak period (February 20 to March 31) for for March 23–27, 2020, compared with the peak periods are similar to the number of daily visits,
2020. We use the first quarter of 2019, adjusted for the For the pre- versus post-peak periods in 2020, the corresponding week in 2019.5 although changes are more muted because the same
day of the week,4 as a benchmark (see Figure 1). average number of daily visits increased by 10% (see clients are logging on multiple times on the same day.
Figure 2). In 2019, daily visits declined by 1% during the Only 8% of retail investors visited the Vanguard website
During the pre-peak period, digital attention in 2020 was same timeframe. Year over year, attention increased by or mobile app on any given day.
already higher than during the same time in 2019 as the 38% in the post-peak period (compared with 24% in the
market was rising. Attention increased even more during pre-peak period).
the market volatility that resulted from the coronavirus Figure 2. Average daily visits during the first quarter of 2019 and 2020
pandemic. Spikes in daily visits align with large changes
in the S&P 500 daily close. Digital attention was cyclical Representative sample of 17,000 continuous Vanguard U.S. self-directed retail investors
across the week. Between 2019 and 2020, there is very
Visits Proportion of clients
Figure 1. Number of daily visits in the first quarter of 2019 and 2020 2019 2020 % change 2019 2020 % change
Representative sample of 17,000 continuous Vanguard U.S. self-directed retail investors January 1,735 2,142 23% 6.8% 7.8% 15%
Pre-peak
January February March
period February 1-19 1,632 2,037 25 6.6 7.4 12
4,000
February 20-29 1,774 2,176 23 7.0 7.8 11
Post-peak
period March 1,635 2,358 44 6.3 8.1 29
Number
of visits
Pre-peak period 1,696 2,102 24 6.7 7.6 13
Post-peak period 1,671 2,313 38 6.5 8.1 25
0
Note: Data for the first quarter of 2019 are shifted by one day to adjust for day of the week.
Vertical lines indicate Mondays High market volatility
15% Source: Vanguard, 2020.
Change in S&P 500
daily close
0%
-15%
2020 2020 linear trend 2019 2019 linear trend
Note: Data for the first quarter of 2019 are shifted by one day to adjust for day of the week.
Source: Vanguard, 2020.
January February March
200%
number of visits
Normalized
0%
Vertical lines indicate Mondays High market volatility
15%
Change in S&P 500
daily close
0%
-15%
Desktop Mobile app Mobile browser
Desktop
3 Each unique visit linear trend
is counted. For example,Mobile app linear
if an investor trend
visits Mobileand
in the morning browser linear again
then visits trend in the afternoon, that equates to two visits.
5 March over March, logins to the Vanguard website or mobile app increased by 64% for all retail clients. Our sample is biased toward more tenured investors. New
2 4 Data for the first quarter of 2019 are shifted by one day to adjust for the day of the week and its impact on attention. investors—those with less than three months of tenure—log in more frequently. 3Investors are able to access Vanguard online through What are investors doing when they access the Figure 4. Incidence of visits for different activities
multiple channels: via desktop, mobile app, or mobile website? Vanguard investors are able to access
Representative sample of 17,000 continuous Vanguard U.S. self-directed retail investors
browser. Approximately 60% of visits take place via thousands of webpages through the retail website and
desktop, 30% via mobile app, and 10% via mobile mobile app. This enables investors to look at important
browser. Figure 3 shows the normalized number of daily information and perform common activities and tasks
visits to see scaled changes in digital attention by such as checking their account information or managing Checking account Exploring
channel—there are no changes. Attention increased a trade. information Managing trades investment options
proportionately by channel.
January February March
4,000 In this study, online behavior is measured as the Panel A: Incidence of visits via desktop
We note that digital attention is dominated by the incidence of visits where an investor accessed at
Account 68.3% Manage 11.1% Investment 7.2%
desktop channel.6 Two-thirds of investors used only the least one webpage related to a given task or activity. homepage 67.1% trade options 9.7%
15.8%
desktop channel to access Vanguard online, while about Through cookies, we can associate activity to a specific
Number
of visits
20% of investors used some combination of desktop investor even when the investor isn’t logged on. We Balance and 44.8%
Trade 7.9% Funds 3.5%
and mobile channel. About 15% of investors used only focus on some of the most important and common holdings 48.0% confirmation and ETFs
11.6% 5.0%
mobile channels to access Vanguard online. Comparing activities performed online in the first quarter of 2020 performance
the pre-
0 versus post-peak periods, there is no shift in (see Figure 4). We group similar activities together. For Personal 7.4%
Vertical lines indicate Mondays This suggests performance Funds and 1.9%
how investors used different channels. example, Vanguard’s website has volatility
High market many fund-information 4.6% ETFs lists
15% 2.6%
that investors’ device preferences remained static during pages but we group the accessing of all fund pages as
Change in S&P 500
this period. one activity.
daily close
Portfolio 0.6%
0% allocation 1.1%
-15%
Figure 3. Normalized
2020 2020number
linear trend of daily
2019visits in the
2019 first
linear trendquarter of 2020 by channel Panel B: Incidence of visits via mobile app
Representative sample of 17,000 continuous Vanguard U.S. self-directed retail investors Account 84.7% Manage 5.5% Investment 4.7%
homepage 84.4% trade options
7.8% 6.0%
January February March
Balance and 37.2%
200%
holdings Trade 3.4% Funds 1.4%
42.1% confirmation and ETFs
4.8% 2.1%
performance
number of visits
14.4%
Normalized
Personal
performance 16.7% Funds and 1.4%
ETFs lists 1.9%
Portfolio 0.9%
allocation 0.7%
0%
Vertical lines indicate Mondays High market volatility
15%
Change in S&P 500
Panel C: Incidence of visits via mobile browser
daily close
0%
Account 48.8% Manage 5.9% Investment 4.9%
homepage trade options
47.5% 8.3% 7.3%
-15%
Desktop Mobile app Mobile browser Balance and 29.4% Funds 2.8%
holdings Trade 3.6%
Desktop linear trend Mobile app linear trend Mobile browser linear trend 31.1% and ETFs 4.5%
confirmation 5.6% performance
Note: The number of daily visits is normalized to show scaled changes in digital attention by channel. Personal 5.5%
Funds and 1.3%
Source: Vanguard, 2020. performance 2.8% ETFs lists
1.5%
Portfolio 0.3%
allocation 0.7%
Pre-peak period Post-peak period
Note: For incidence of visits, we counted a visit when at least one webpage related to given activity was accessed.
Source: Vanguard, 2020.
4 6 This is consistent with the 2019 Vanguard research paper The Digital Investor: Financial Attention Through Multiple Digital Channels, available at vanguard.com. 5Investors are able to access Vanguard online through What are investors doing when they access the Figure 4. Incidence of visits for different activities
multiple channels: via desktop, mobile app, or mobile website? Vanguard investors are able to access
Representative sample of 17,000 continuous Vanguard U.S. self-directed retail investors
browser. Approximately 60% of visits take place via thousands of webpages through the retail website and
desktop, 30% via mobile app, and 10% via mobile mobile app. This enables investors to look at important
browser. Figure 3 shows the normalized number of daily information and perform common activities and tasks
visits to see scaled changes in digital attention by such as checking their account information or managing Checking account Exploring
channel—there are no changes. Attention increased a trade. information Managing trades investment options
proportionately by channel.
January February March
4,000 In this study, online behavior is measured as the Panel A: Incidence of visits via desktop
We note that digital attention is dominated by the incidence of visits where an investor accessed at
Account 68.3% Manage 11.1% Investment 7.2%
desktop channel.6 Two-thirds of investors used only the least one webpage related to a given task or activity. homepage 67.1% trade options 9.7%
15.8%
desktop channel to access Vanguard online, while about Through cookies, we can associate activity to a specific
Number
of visits
20% of investors used some combination of desktop investor even when the investor isn’t logged on. We Balance and 44.8%
Trade 7.9% Funds 3.5%
and mobile channel. About 15% of investors used only focus on some of the most important and common holdings 48.0% confirmation and ETFs
11.6% 5.0%
mobile channels to access Vanguard online. Comparing activities performed online in the first quarter of 2020 performance
the pre-
0 versus post-peak periods, there is no shift in (see Figure 4). We group similar activities together. For Personal 7.4%
Vertical lines indicate Mondays This suggests performance Funds and 1.9%
how investors used different channels. example, Vanguard’s website has volatility
High market many fund-information 4.6% ETFs lists
15% 2.6%
that investors’ device preferences remained static during pages but we group the accessing of all fund pages as
Change in S&P 500
this period. one activity.
daily close
Portfolio 0.6%
0% allocation 1.1%
-15%
Figure 3. Normalized
2020 2020number
linear trend of daily
2019visits in the
2019 first
linear trendquarter of 2020 by channel Panel B: Incidence of visits via mobile app
Representative sample of 17,000 continuous Vanguard U.S. self-directed retail investors Account 84.7% Manage 5.5% Investment 4.7%
homepage 84.4% trade options
7.8% 6.0%
January February March
Balance and 37.2%
200%
holdings Trade 3.4% Funds 1.4%
42.1% confirmation and ETFs
4.8% 2.1%
performance
number of visits
14.4%
Normalized
Personal
performance 16.7% Funds and 1.4%
ETFs lists 1.9%
Portfolio 0.9%
allocation 0.7%
0%
Vertical lines indicate Mondays High market volatility
15%
Change in S&P 500
Panel C: Incidence of visits via mobile browser
daily close
0%
Account 48.8% Manage 5.9% Investment 4.9%
homepage trade options
47.5% 8.3% 7.3%
-15%
Desktop Mobile app Mobile browser Balance and 29.4% Funds 2.8%
holdings Trade 3.6%
Desktop linear trend Mobile app linear trend Mobile browser linear trend 31.1% and ETFs 4.5%
confirmation 5.6% performance
Note: The number of daily visits is normalized to show scaled changes in digital attention by channel. Personal 5.5%
Funds and 1.3%
Source: Vanguard, 2020. performance 2.8% ETFs lists
1.5%
Portfolio 0.3%
allocation 0.7%
Pre-peak period Post-peak period
Note: For incidence of visits, we counted a visit when at least one webpage related to given activity was accessed.
Source: Vanguard, 2020.
4 6 This is consistent with the 2019 Vanguard research paper The Digital Investor: Financial Attention Through Multiple Digital Channels, available at vanguard.com. 5Overall, it appears investors may prefer to perform Overall, market volatility spurred more visits to manage
different activities in different channels. For example, trade but did not seem to affect which device investors
investors checked their account homepage on 85% chose to use—visits to manage trade increased across
of visits via mobile app, compared with 68% of visits all channels.
via desktop.7 On the other hand, visits to explore
investment options were more prevalent via desktop. But not all visits to manage a trade led to an actual
And managing trades was twice as common via execution, and trade execution varies by channel. For
desktop as via mobile app. example, in the post-peak period, 15.8% of visits via
desktop were spent managing trades, but only 11.6%
Very few visits (~1%) were spent checking portfolio of visits saw a trade confirmation. For the mobile app,
allocation. Instead, investors looked at their detailed in the post-peak period, 7.8% of visits were spent
balance and holdings information, in concentrations managing trades but only 4.8% saw a confirmation.
ranging from 45% of visits via desktop to 29% via
mobile browser. Allocation is an important aspect of Less than 10% of visits typically are spent exploring
investing: Research shows that portfolio asset allocation investment options, regardless of channel. However,
is responsible for about 90% of investment returns.8 The in the post-peak period, these visits increased regardless
small percentage of visits to check portfolio allocation of channel.
could be because many investors have just one account
at Vanguard and likely have accounts with other financial A key takeaway is that digital attention was already
institutions. So their Vanguard account might be just one increasing in 2020 as the market was rising but that
part of their total portfolio. market volatility further fueled this increase. Visits to
Vanguard online remain dominated by the desktop
Investors were most likely to access information about channel, but we see preferences for activity by device
personal performance via a mobile app, but less than type and the type of information consumed. Market
20% of visits included this activity. There were only volatility led to increased visits to explore investment This page intentionally left blank
small changes in the percentage of those looking at options and manage trades. Fundamental measures such
personal performance by channel pre- and post-peak. as asset allocation and personal performance saw very
The dominance of balance checking over personal little activity.
performance suggests investors are most interested
in current wealth.
7 While the homepage is the default, when an investor logs in, the investor has the option of overriding this default and setting another page as the landing destination.
6 8 See the 2017 Vanguard research paper The Global Case for Strategic Asset Allocation and an Examination of Home Bias, available at vanguard.com. 7Connect with Vanguard® > vanguard.com.hk
Vanguard Investments Hong Kong Limited
48/F, The Center
Research authors
99 Queen’s Road Central, Hong Kong
Jennie Huang, Ph.D. Phone: 3409 8333
Jean A. Young Email: sales@vanguard.com.hk
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