ASX investor study 2023: record number of adult investors, as women and younger Australians drive market growth

A new study of the Australian investment market has found that women and younger Australians are playing a growing role in the stock market as the number of adult investors hits a record 10.2 million.

The ASX Australian Investor Study 2023 also found that shareholders have an increased environmental, social, and corporate governance (ESG) focus in making their decisions on where to place their cash.

The ASX’s general manager, investment products and strategy, Andrew Campion, said the annual survey identified an increasing number of female investors and young Australians are playing a key role in the investment landscape.

The survey identified that investors in the 18 to 24 age range now make up more than one fifth (22%) who entered the investment market in the last two years.

“The ASX Australian Investor Study is ASX’s flagship research that provides an authoritative guide on the evolution of investment markets and investor behaviour,” Mr Campion said.

“Our latest study has found that the number of investors that hold on-exchange investments has grown from 6.6 million to 7.7 million in 2023 – the highest proportion of on-exchange investors in over a decade. This equates to 38% of Australian adults.”

More female investment growth to come

According to the ASX survey, women investors are still under-represented as a whole (42% vs 58%), with many identifying affordability as their primary barrier to investing.

This has been linked to the fact that Australian women on average are earning 25% less than their male counterparts ($85,655 vs $107,466).

The ability to identify investment information sources was also highlighted as a challenging aspect of investing for the females surveyed, with over a third naming family and friends as their guides in making decisions.

“They are less likely than males to turn to professional sources such as the ASX website, company annual reports and paid subscription investing websites,” the survey suggested.

Mr Campion said Covid has created the wave of new retail investors.

“While retail trading value has returned to ‘pre-Covid’ levels, the number of investors holding on-exchange investments continues to steadily grow.”

“We will continue to see younger investors enter the market for the first time. This cohort will make up almost 30% of the 1.33 million non-investors that intend to invest in the next 12 months.”

Socially responsible investing on the rise

The ASX also found that an increasing number of retail investors are considering responsible-investing principles in making their decisions and turning their backs on companies they deem to be creating social or environmental harm.

Emilie O’Neill, co-head of ESG and an equities analyst at fund management firm Perennial Partners, said responsible investing is a process that acknowledges Environmental, Social and Governance (ESG) factors in investment decisions.

“The results on ESG investing are very encouraging. The report shows that almost two thirds of retail investors are willing to invest in a sustainable way,” she said.

The latest Responsible Investment Association Australasia (RIAA) Benchmark Report found that an estimated $1.54 trillion of assets under management in Australia – about 43% of all professionally managed funds – was invested responsibly in 2021.

The ASX says some of this change can be attributed to the increase in responsible investment vehicles.

The new survey noted that in the past ethical fund choices were limited and were often attached to higher fees.

Today, retail investors can choose via ASX from a range of Exchange Traded Fund (ETFs), Listed Investment Companies (LICs) and unit trusts (through mFund) that use ESG filters to invest in local and global assets. Some ESG ETFs have low fees.

ETFs on the rise

The annual ASX report also identified that exchange traded funds (ETFs) continue to grow in popularity with 20% of investors holding such investments, up from 15% three years ago.

“This growth aligns with ASX’s latest statistics where total ETF funds under management has grown by an astonishing $80 billion from $63.5 billion in May 2020 to $143.5 billion as at the end of May 2023,” Mr Campion said.

“The report also compares holdings of different asset classes and found that there’s been a slight dip in residential property investment (down 4%), but gains in shares and ETFs, suggesting Australians are looking at other ways to build wealth outside of property.”

New leadership team named

The ASX has also revealed a number of changes to its executive leadership team.

Clive Triance, currently a managing director, head of strategic account management at US-based financial technology company, FIS, has been named to replace group executive securities and payments, Tim Hogben, who is departing the ASX to pursue new opportunities.

Group executive, people and culture, Lisa Green, has also confirmed her intention to depart. She will continue in her current capacity until the new Chief People Officer is appointed.