The second iteration of HSBC’s Investor Insights Survey, which canvassed 1,056 Australian investors aged 18 and above, found that 76 per cent of Australian investors changed their investment approach in the last six months, with 29 per cent of investors moving to a more conservative investment approach and just 9 per cent taking a more aggressive approach.
HSBC said that this more conservative approach is being driven by a high inflationary economic environment, with Australians having an increased interest in bonds, ETFs, and managed funds.
Donahue D’Souza, head of investments for HSBC Australia, said: “It’s clear from our research that the continued interest rate increases and concerns of an economic slowdown has dimmed self-directed investor confidence.
“It has been a tough year impacting people in different ways, and we know the main focus in Australian households has been on consolidating debt. However, this should be a trigger for investors to re-evaluate their investment strategies to consider how they can achieve wealth creation or their financial goals and objectives outside of superannuation and property.
“When it comes to investing, diversification remains key. Investing also remains a fundamental tool in generating long-term wealth as part of a holistic financial strategy.”
The survey also found that Australians are using less of their monthly net income towards investing (15.8 per cent) compared with last year (18.3 per cent), with Gen Z contributing 19.9 per cent of their disposable income towards investing on average, compared with 10.9 per cent for Baby Boomers.
Market research/industry/analyst reports were the leading source of investment information for Australian investors at 36 per cent, while companies’ websites and reports were a source of information for 33 per cent of investors, followed by financial advisers at 31 per cent.
There was also a noticeable drop in how many investors were looking to social media for investment information, dropping from 19 per cent in 2022 to just 13 per cent in 2023.
The drop was most significant among younger investors, with the number for Gen Z falling from 37 per cent last year to 20 per cent in 2023. Millennials have also reduced their reliance on social media, down from 26 per cent in 2022 to 19 per cent in 2023.
Gender investing gap
According to the HSBC survey, there has been a 7 per cent drop in female investors since 2022 and a 4 per cent decline among male investors. Women also invest less frequently than men, with only 34 per cent of women investing monthly or more, compared with 47 per cent of male investors.
“There is already a known financial gap between both the wages and superannuation savings of women and men. Women are more likely to take career breaks or reduce their working hours to look after children or elderly parents, thereby affecting their superannuation contributions and retirement income,” Mr D’Souza said.
“This also seems to extend to their investing activity which has the potential to further exacerbate the gap, so we encourage those who feel they need to do more to review their investments and seek trusted financial advice to achieve their investment goals.”