Australians are investing less and more conservatively: HSBC survey

The second iteration of HSBC’s Investor Insights Survey¹ found that Australians are using less of their monthly net income towards investing (15.8%) compared to last year (18.3%), with younger Australians contributing the most of their disposable income towards investing (19.9% average amongst Gen Z) compared to their Baby Boomer counterparts (10.9%).
The research also showed that 41% of Australians currently own an investment that is not super, a savings account or the primary home they live in, which has declined from 47% in 2022.

Now is the time to take stock of your investment strategy

Against a high inflationary economic environment, Australians have pivoted towards a more conservative investing approach with 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,” he said.

Decline in female investors highlights need to close the wealth gap

According to the survey, there has been a 7% decline in female investors since 2022 compared to a 4% decline among male investors. Women also invest less frequently than men, with only 34% of women investing monthly or more often compared to 47% of male investors.

Compared to their male counterparts, the research found that female investors (35%) are less likely than male investors (53%) to say that they know how to invest outside of Australia.

“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. 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,” Mr D’Souza concluded.

ADDITIONAL STATISTICS

• 7% decline in female investors over the past year (32% of Australian women 18+ are investors in 2023 compared to 39% in 2022) compared to a 4% decline among male investors (51% of Australian men 18+ are investors in 2023 compared to 55% in 2022).

• 2023 research reveals that on average, Australian investors believe that $15,200 is the minimum amount needed to start investing, which is slightly higher than the average $14,800 in 2022.

• The most popular sources of investment information have remained the same as last year, including market research/ industry/analyst reports (36%), companies’ websites and reports (33%), and financial advisors (31%).
• However this year, investors are looking at social media less for investment information (2023: 13% compared to 2022: 19%), particularly younger investors (Gen Z: 20% in 2023 compared to 37% in 2022, Millennials: 19% in 2023 compared to 26% in 2022).

• Women generally invest less often than men with 47% of male investors investing monthly or more often, compared to just 34% of female investors.
• Gen X and Baby Boomers generally invest less often than those younger (just 40% of Gen X and 14% of Baby Boomer investors invest monthly or more often compared to 53% of Gen Z and 62% of Millennial investors).

• A bigger proportion of current investors said that they started investing at the young age of 18-24, increasing from 36% in 2022 to 41% in 2023.
• A higher proportion of current female investors have said that they started investing before the age of 25, increasing from 36% in 2022 to 45% in 2023.