More retail online investors are entering the market than ever before, and the number of people trading ETFs has risen by more than 10 per cent in the past six months.
According to research firm Investment Trends’ 2018 First Half Online Broking Report, which compiles research from a survey of over 11,000 investors, the number of online retail investors hit a new record, exceeding 700,000 in H1 2018.
Furthermore, the number of ETF investors also rose by 11.6 per cent, rising to 720,000 in May from 645,000 six months ago.
Investment Trends research director Irene Guiamatsia noted that the first half of 2018 saw the “three engines of growth … firing on all cylinders,” attracting new investors to the industry.
“The February market correction generated interest around the world for assets perceived to be undervalued, and Australian investors were no different,” Ms Guiamatsia said in a statement.
Research findings also revealed a low level (4 per cent) of switching activity in the past 12 months.
“The improved retention efforts of the big four brokers – CommSec, ANZ, Westpac and nabtrade – has kept switching to a minimum,” Ms Guiamatsia said.
But those who traded more frequently tended to switch more often as well, with switching activity of those who placed four or more trades a month rising to 9 per cent from 4 per cent in November 2016.
“Brokers that most effectively identify and respond to the needs of frequent traders will benefit,” Ms Guiamatsia noted.
The functionality of mobile platforms is also becoming more important in broker selection, the research said.
Ms Guiamatsia called mobile functionality a “key battleground” going forward.
“CommSec has a first mover advantage and continues to dominate in this area, but brokers like IG and CMC Markets are providing strong competition.”