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Survey Highlights
2015 First Half Australia Trading Behaviour Survey
© 2015 Investment Trends 1
2015 First Half Australia Trading
Behaviour Survey
Highlights from the Investment Trends
2015 First Half Australia Trading Behaviour Survey
1Copyright 2015 Investment Trends Pty Ltd. 2014 Second Half Australia Online Broking Report. Confidential. Investment Trends internal use only. Reproduction prohibited.
Survey concluded: June 2015
Reproduction prohibited
2015 First Half
Australia Trading Behaviour Survey
Highlighted Findings
Survey Highlights
2015 First Half Australia Trading Behaviour Survey
© 2015 Investment Trends 2
Thank you
Thank you again for taking part in our 2015 First Half Australia Trading
Behaviour Survey.
Your responses, together with those of other investors, provide a valuable
insight into the current state of the Australian investment landscape. The
resulting research will help stockbrokers and other providers create products
and services better suited to your needs.
The 2015 First Half Australia Trading Behaviour Reports provide a detailed
portrait of Australia’s sophisticated population of active share investors and
CFD traders. Many key findings are highlighted in this extract, including some
fascinating insights into the behaviour of your fellow investors.
I hope you find it interesting.
Yours sincerely,
Mark Johnston
Principal
Investment Trends
Suite 2102, Goldfields House
1 Alfred Street
SYDNEY NSW 2000
Australia
Survey Highlights
2015 First Half Australia Trading Behaviour Survey
© 2015 Investment Trends 3
Table of contents
About Investment Trends 4
Methodology and scope 5
Investor concern levels 6
Capital gains expectations 7
Online broking market size 8
Impact of reduced settlement cycle 9
Contacting potential brokers 10
International shares 11
International exposure 12
Investment instruments familiarity 13
CFD market size 14
CFD trader satisfaction 15
Education for CFD trading 16
Smartphone usage 17
Survey Highlights
2015 First Half Australia Trading Behaviour Survey
© 2015 Investment Trends 4
About Investment Trends
Investment Trends is a specialist research organisation which provides new
business insights and decision support information to many leading financial
services organisations. We combine analytical rigour and strategic thinking
with the most advanced market research and statistical techniques to help our
clients gain competitive advantage.
Investment Trends is headed by Mark Johnston. Mark has been a leading
industry analyst in the brokerage, CFD, FX and wealth management industry
since 1999.
Investment Trends was started in Australia and is now a multi-national
research organisation servicing clients in Australia, Asia, Europe and the US.
Our work is focused on helping clients answer three fundamental questions:
1. How does the market currently work?
2. How is the market evolving?
3. How do I improve business outcomes:
• Acquire more customers
• Retain more existing customers
• Increase revenue per customer
• Prioritise technology and process investments
Investment Trends’ clients include many of the leading banks, investment
platform providers, online brokers, FX and CFD providers, as well as major
industry regulators.
Survey Highlights
2015 First Half Australia Trading Behaviour Survey
© 2015 Investment Trends 5
Methodology and scope
The 2015 First Half Australia Trading Behaviour Survey examines the trading
behaviour of Australian online investors and traders. The report is based on a
detailed online survey of Australian online investors concluded in June 2015.
A total of 15,024 valid responses to the survey were received after data
cleaning and de-duplication.
Survey Highlights
2015 First Half Australia Trading Behaviour Survey
© 2015 Investment Trends 6
Investor concern levels
Investor concern levels remained steady
during the first half of the year
Share investors’ sentiment remained stable during the first half of 2015,
despite the bull market run in Q1 and subsequent correction triggered by
worries over China and Greece. The average concern level hovered between
6.0 and 6.2 (out of 10) during the six months to June 2015.
2Copyright 2015 Investment Trends Pty Ltd. 2015 First Half Australia Trading Behaviour Survey. Confidential. Investment Trends internal use only. Reproduction prohibited.
Concern level vs All OrdinariesAmong share traders
6.1
6.2
6.0
6.2
5.9
6.1
5.7
5.4
5.8
5.6
6.0
5.8
6.36.4
6.2
6.3
5.9
6.6
6.5
6.8
6.4
6.7
7.1
7.47.3
6.9
6.5
6.9
6.3
7.4
3,000
3,500
4,000
4,500
5,000
5,500
6,000
6,500
Apr-0
8
Jul-0
8
Oct-08
Jan-
09
Apr-0
9
Jul-0
9
Oct-09
Jan-
10
Apr-1
0
Jul-1
0
Oct-10
Jan-
11
Apr-1
1
Jul-1
1
Oct-11
Jan-
12
Apr-1
2
Jul-1
2
Oct-12
Jan-
13
Apr-1
3
Jul-1
3
Oct-13
Jan-
14
Apr-1
4
Jul-1
4
Oct-14
Jan-
15
Apr-1
5
All
Ord
inar
ies
4
4.5
5
5.5
6
6.5
7
7.5
8
8.5
Ave
rag
e co
nce
rn le
vel
All Ordinaries Index (LHS) Average concern level among investors in Australia (RHS)
Investor concern levels have not been materially affected by the recent bull market and correction
Question wording:
How concerned are you with the current state of the world’s financial markets? (Please rate how
concerned you are, where 0 is not at all concerned and 10 is extremely concerned)
Source: June 2015 Investor Intentions Index Report
June
-15
Survey Highlights
2015 First Half Australia Trading Behaviour Survey
© 2015 Investment Trends 7
Capital gains expectations
In June 2015, Australian investors expected an annual
return of 3% from the share market on average
In the first half of 2015, average return expectations (excluding dividends) on
stocks were back to tracking actual market performance after being
disconnected from the growth of the ALL ORDS index from mid 2013.
Whilst capital gains expectations reached 6% in February 2015, they were back
to 3% at the time the survey was conducted.
3Copyright 2015 Investment Trends Pty Ltd. 2015 First Half Australia Trading Behaviour Survey. Confidential. Investment Trends internal use only. Reproduction prohibited.
Return expectations excluding dividends vs All OrdinariesAmong share traders
3%3%
4%
4%
6%
13%
8%
7%
4%4%
3%
2%3%
5%
4%3%
4%
3%
4%
5%
7%
8%
6%
5% 5%
6%
7%
6%
5%
6%
5%
6%
5%
6%
4%4%
3%
4%
2%
3%
3,000
3,400
3,800
4,200
4,600
5,000
5,400
5,800
Nov-0
9
Jan-
10
Mar
-10
May
-10
Jul-1
0
Sep-1
0
Nov-1
0
Jan-
11
Mar
-11
May
-11
Jul-1
1
Sep-1
1
Nov-1
1
Jan-
12
Mar
-12
May
-12
Jul-1
2
Sep-1
2
Nov-1
2
Jan-
13
Mar
-13
May
-13
Jul-1
3
Sep-1
3
Nov-1
3
Jan-
14
Mar
-14
May
-14
Jul-1
4
Sep-1
4
Nov-1
4
Jan-
15
Mar
-15
May
-15
All
Ord
inar
ies
0%
2%
4%
6%
8%
10%
12%
14%
Ave
rag
e re
turn
exp
ecta
tio
n (
excl
ud
ing
div
iden
ds)
All Ordinaries Index (weekly close) Average return expectation for next 12 months (excluding dividends)
Capital gains expectations are back to tracking market performance, but remain stubbornly low
Question wording:
What is your expectation for the Australian stock market
over the next 12 months (excluding dividends)?
Source: June 2015 Investor Intentions Index Report
Survey Highlights
2015 First Half Australia Trading Behaviour Survey
© 2015 Investment Trends 8
Online broking market size
Online share investor numbers grew from 595,000 in
November 2014 to 620,000 in June 2015
The number of active share investors (those who placed at least one online
trade through an Australian broker in the preceding 12 months) has tracked
upwards since June 2013.
In the seven months to June 2015, the active investor population grew by 4%
pts from 595,000 in November 2014 to 620,000 in June 2015.
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* Figures for 12 months to May 2010
The number of online investors increased by 4%, with 620,000 Australian investors placing at least one online share trade in the 12 months to June 2015
Number of share investors (in thousands) (Traded shares within the last 12 months)
510
600650
610 610 630 615550 530
585 585 595 620
0
100
200
300
400
500
600
700
Sep-08 Jun-09 May-10 Dec-10 May-11 Dec-11 May-12 Dec-12 Jun-13 Dec-13 Jun-14 Nov-14 Jun-15
4%
*
Survey Highlights
2015 First Half Australia Trading Behaviour Survey
© 2015 Investment Trends 9
Reduced settlement cycle
Most traders say the reduced settlement cycle from T+3 to
T+2 would not affect their trading
The majority (76%) of current online investors said the proposed reduced
settlement cycle would not impact their level of trading at all.
9% of frequent traders would trade less often, while only 5% would increase
their trading frequency further as a result of the change.
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Q126 How do you expect the proposed reduced settlement cycle from T+3 to T+2 will affect your level of trading? (Recoded from open-text responses)
Among those who selected their main broker due to availability of credit
9%
5%
7%
78%
0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%
Reduce trading frequency, lesstime to transfer fund
Increase trading frequency,quicker turnaround
Need to transfer morefunds/more often
Don't know
No effect
All current online investors [n=326] Frequent traders [n=59]
More than three out of four (76%) current online investors said the reduced settlement cycle from T+3 to T+2 would not affect their trading
I will trade less as I do not like holding too much cash in cash account which is not government guaranteed and pays extremely low interest
I think it will be excellent giving you the ability to do more trades, settlement in less time
Survey Highlights
2015 First Half Australia Trading Behaviour Survey
© 2015 Investment Trends 10
Contacting potential brokers
Investors are more likely to contact their next broker during
account opening than before opening an account
Online traders who have used their current broker for less than 2 years are
more likely to have made contact during account opening process rather than
prior to making the decision to open an account. 48% of those traders
contacted their broker before opening the account, while 64% of them did so
during the account opening process.
Phone is the most popular method for online traders to contact their brokers.
22% of online broking clients contacted the broker they currently use via
phone before opening account, whilst 31% of them made such contact via
phone during the account opening process.
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Online traders are more likely to contact their broker during the account opening process rather than before making the decision to open one
Q120 Did you contact [your main online broker] before opening your trading a/c, and if so, how? Among those who have used their broker for less than 2 years [n=2305]
18%26%
22%
31%8%
6%
41%
28%
3%
9% 6%
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
Before opening the account During the account opening process
I don't remember
Other
I didn't contact them
In person at a branch
Via social media
Via phone
Via email
Survey Highlights
2015 First Half Australia Trading Behaviour Survey
© 2015 Investment Trends 11
International shares
Diversification is the most common reason
for trading international shares
Current online investors who hold international shares most often trade the
asset class for diversification (66%, up 7% from 2014).
Compared to previous years, more online investors are trading international
shares because they expect a better market performance from overseas
markets (25%, up from 19% in 2013).
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Q163 Why do you trade international shares? (Multiple responses permitted) Among current online investors who hold international shares
0% 10% 20% 30% 40% 50% 60% 70%
Diversification
I think the Australian dollar willdepreciate
Access to sectorsunderrepresented in Australia
I hold company shares*
I think developed overseasmarkets will perform better
I know certain o/s companieswill do particularly well
Overseas background
I think emerging overseasmarkets will perform better
Other
June 2013 [n=980] Jun 2014 [n=1225] Jun 2015 [n=1486]
More online investors are trading international shares because they expect overseas markets to perform better
Survey Highlights
2015 First Half Australia Trading Behaviour Survey
© 2015 Investment Trends 12
International exposure
The US is the most desired market to gain international
exposure for Australian online investors
Australian investors who want access to international shares most often point
to the US (56%), Europe (35%) and the UK (29%) as being the most desired
markets they would like exposure to.
Frequent traders are relatively more likely to ask for exposure to China (34%),
India (13%) and Canada (9%), with China being their second most desired
overseas market.
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Q137 Which specific overseas markets would you like to have access to? (Recoded from open-text responses) Among current online investors who would like
access to overseas markets
53%
28%
27%
34%
20%
13%
12%
9%
13%
9%
4%
0% 10% 20% 30% 40% 50% 60% 70%
USA
Europe
UK
China
Asia
Hong Kong
Japan
Singapore
India
Germany
Canada
Other
Don't know
All current online investors [n=611] Frequent traders [n=89]
Those who asked for access to international shares indicated they would prefer exposure to the US, Europe and UK. Frequent traders were more likely to be
interested in Chinese, Indian and Canadian stocks
Survey Highlights
2015 First Half Australia Trading Behaviour Survey
© 2015 Investment Trends 13
Familiarity with investment instruments
More online investors are familiar with FX trading
Post Swiss Franc crisis, 70% of online investors say they are familiar with FX
trading (up from 61% in November 2014). 55% (up from 45%) are familiar with
ETFs and 38% (up from 36%) are familiar with CFDs. Only 14% know about
binary options (up from 9%).
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Q3 How familiar would you say you are with the following instruments? Among current online investors [Jun 2015: n=9968; Nov 2014: n=6527]
20% 20%10%
3%
50%
35%
28%
11%
29%
39%
50%
52%
6%12%
34%
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
FX ETFs CFDs Binary options
Never heardof it
Not familiar
Somewhatfamiliar
Veryfamiliar
A larger proportion of online investors report being familiar with FX (70%, up from 61% in November 2014). 38% are familiar with CFDs
Background represents Nov 2014 results
Survey Highlights
2015 First Half Australia Trading Behaviour Survey
© 2015 Investment Trends 14
CFD market size
The Australian CFD market expanded
by 2% pts in the last 12 months
As at June 2015, 43,000 people placed at least one CFD trade in the preceding
12 month period, up 2% pts year on year.
Spikes in volatility in the past year have sustained the growth for the second
year running.
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The number of active Australian CFD traders continued to increase slightly, edging closer to 2012 levels
Market sizing: Current traders (traded within last 12 months)
9,000
31,000
26,000
32,000
39,00041,000
44,00041,000 42,000 43000
Sep 2005 Apr 2007 Aug 2008 May 2009 May 2010 May 2011 May 2012 Jun 2013 Jun 2014 Jun 2015
+2% +2%
Survey Highlights
2015 First Half Australia Trading Behaviour Survey
© 2015 Investment Trends 15
CFD trader satisfaction
CFD traders were more satisfied than a year ago
CFD traders reported being more satisfied with most service elements
measured compared to a year ago. Their overall composite satisfaction score
was 77%, up from 70% in 2014.
Trading ideas and strategies, research tools, smartphone/tablet platform/app,
platform features, risk management, ease of transferring funds and charting
increased the most in satisfaction ratings compared to 2014.
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Composite satisfaction score^: change 2014 to 2015Industry average
55%
61%
72%
63%
72%
70%
72%
72%
66%
62%
76%
74%
63%
70%
63%
70%
58%
63%
74%
65%
74%
72%
73%
73%
66%
63%
77%
74%
63%
70%
63%
77%
67% 69%
2%
2%
2%
2%
2%
2%
2%
1%
1%
1%
1%
1%
0%
0%
0%
0%
7%
100% 80% 60% 40% 20% 0% 20% 40% 60% 80% 100%
Trading ideas and strategies
Research tools
Smartphone/tablet platform/app
Platform features
Risk management
Ease of transferring funds
Charting
Customer service
Platform reliability
Value for money
Spreads
Platform easy to use
Execution speed
Education materials/programs
Consistency of filling trades at price quoted
Commissions
Overall
-50% -40% -30% -20% -10% 0% 10% 20% 30% 40% 50%
2014 2015 Change
^ Very good=100%, Good=67%, Average=50%, Poor=17%, Very poor=0%
Industry-wide, CFD traders were more satisfied than a year ago with most service elements
Survey Highlights
2015 First Half Australia Trading Behaviour Survey
© 2015 Investment Trends 16
Education for CFD trading
Next wave CFD traders would like access to introductory
information on how CFDs work
Current CFD traders who say education materials/programs is important when
choosing a provider most often point to platform features (18%), trading ideas
(17%) and FX trading (17%).
Next wave traders (those who intend to start trading CFDs within the next 12
months) are relatively more likely to look for basic information on how CFDs
work (27%), market insights (20%) and option trading (14%).
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Q89 On which topics would you like to receive education materials from main provider? (Recoded from open-text responses)
Among those who said education materials/programs is important
16%13%
17%20%
6%9%
5%27%
3%
14%
9%
11%
0% 10% 20% 30% 40% 50%
Platform featuresTrading ideas/strategies
FX tradingMarket research/insights
Technical analysisThe risks of CFDs
Comparison of different marketsHow CFDs work
Fundamental analysisComparison of different investment products
Order typesOption tradingShare trading
ETF tradingComparison of different CFD providers
Costs of CFDsOther
Don't knowNone
All current CFD traders [n=80] Next wave CFD traders [n=64]
Next wave CFD traders who said education materials are important would like more information on how CFDs work (27%) and market research/insights (20%)
Survey Highlights
2015 First Half Australia Trading Behaviour Survey
© 2015 Investment Trends 17
Smartphone usage
75% of Australian CFD traders use a mobile device for
trading versus 60% among online share traders
Among seven key leveraged trading markets studied by Investment Trends,
Singapore is the country with highest penetration of mobile devices (88%)
among CFD/FX traders, while Hong Kong has the highest proportion of ‘mobile’
share investors (83%).
Australian investors have a moderate level of smartphone usage, with 75% of
CFD traders using a mobile device in relation to their trading and 60% of online
share investors doing so.
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Proportion of traders who use their smartphone/tablet in the context of trading: International comparison
88% 87% 87%76% 75% 73% 71% 71% 70% 69% 69%
83% 81%
60% 60%53%
48% 46%
8% 7%13%
9%6% 10% 11% 16%
12% 13% 9%
15%10%
12% 11%
11%15%
12%
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
Sing.CFD(Sep2014)
Sing.FX
(Sep2014)
HKlev.
products(Jan 2015)
UK CFD (Sep 2014)
Aus. CFD (Jun
2015)
UK spread betting (Sep 2014)
UK FX
(Sep 2014)
US FX
(May 2014)
Aus. FX
(Dec 2014)
Ger.CFD/FX
(April 2015)
France CFD/FX
(Apr 2015)
HK (Jan
2015)
Sing. (Sep 2014)
US (May 2014)
Aus. (Jun 2015)
UK (Sep 2014)
Ger. (April 2015)
France (Apr 2015)
Leveraged product traders Online stockbroking investors
Currently use a mobile device for trading Intend to start using a mobile device for trading within 12 months
Australian investors and CFD traders had a moderate level of smartphone usage among the seven key leveraged trading markets studied by Investment Trends
Proportion of online investors and traders who use their smartphone/tablet in the context of trading:
Survey Highlights
2015 First Half Australia Trading Behaviour Survey
© 2015 Investment Trends 18
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ACN: 107 485 656
Suite 2102, Goldfields House
1 Alfred Street
SYDNEY NSW 2000
Australia
Phone: +61 (0) 2 8248 8000
Fax: +61 (0) 2 8248 8088
www.investmenttrends.com.au
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