Despite COVID-19 leaving individuals and businesses to face an uncertain future, retail investors’ appetites for shares have increased throughout the pandemic, a new report has found.
Research released by Calastone, which builds on investor surveys conducted before and during the pandemic has shown that investors around the world are increasing their exposures despite an uncertain future.
Overall, comparison of the 2021 and 2020 results revealed a marked increase in investment appetite and activity as a direct result of COVID-19.
Although 75 per cent of Millennials surveyed globally said they had invested or would invest soon, only 7 per cent have actually made the move.
Instead, the older generations are leading the charge, with 52 per cent of Generation X admitting they have made an investment in light of COVID-19, a rise of 18 per cent since 2020.
Baby Boomers followed, showing an 11 per cent rise in active investments in light of the pandemic. The lift for Millennials was less pronounced at 7 per cent.
“Calastone’s research shows that COVID-19 and its implications for people and markets have continued to be a tailwind for investment in managed funds,” Calastone head of Australia and New Zealand Ross Fox said.
Driving the market change
According to the results, investors are actually embracing the uncertainty and volatility that comes with a distorted market.
Calastone said that a good deal of the shift in investor behaviour reflects a mix of pent-up demand, growing confidence in the economic outlook and an increased appreciation of financial security.
Moreover, Calastone revealed that 32 percent of participants surveyed from the UK, US, Australia, New Zealand, Hong Kong and Germany are more likely to invest in light of the current COVID-19 situation, and 42 percent have already done so as a direct consequence of the virus.
“Investors adopting a more proactive and opportunistic approach is also evident in the flow of funds that we continue to see across our network, with $10.2 billion flowing into Australian-based managed funds this year,” Calastone’s head of Australia and New Zealand Ross Fox said.
Apprehension remains
While many investors are taking the leap, anxiety still remains a strong factor as the world grapples with the pandemic.
Levels of anxiety have abated for Australian and New Zealand investors, though they are still high; 66 per cent of Australians and 62 per cent of New Zealanders said COVID-19 has made them more worried about their financial future, down respectively from 72 and 64 per cent in 2020.
“While Australia currently feels the weight of COVID while other parts of the world appear to be recovering from the pandemic, rising levels of local engagement, ease of investing and product knowledge is a testament to the efforts of fund managers and distributors who have kept investors well informed and engaged throughout the last 18 months,” Mr Fox concluded.
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