The latest CoreData Australian Investor Report indicates that outside institutional investors, investment markets are primarily being driven by high-risk profile investors.
High-risk investors, accounting for only 15 per cent of the population, identify opportunities in the market before most and aim to buy at the bottom of the market.
Conservative investors account for 52 per cent of the population, while moderate investors make up the remaining 33 per cent.
According to the report, high-risk profile investors are more optimistic about the economy, with 53.3 per cent expecting the economy to pick up speed.
Only 38.4 per cent of moderate investors and 32.3 per cent of conservative investors felt this way.
CoreData wealth and super head of advice, Salvador Saiz, said while cash remains popular with conservative and moderate investors, high-risk investors are looking to invest in equities.
“With substantial amounts of cash still sitting on the sideline and with investor sentiment continuing to climb, it will be high-risk profile investors most likely to drive the share market in the coming quarter, with direct shares being the most popular next investment for these,” said Mr Saiz.
Cash was recorded as the most popular investment, at 33 per cent, followed by residential property at 17.7 per cent and direct shares at 14.7 per cent.
The research also indicated 20.3 per cent of high-risk profile investors have invested directly in Australian equities.
Only 4.5 per cent, however, held term deposits.
Mr Saiz said lack of knowledge was behind a bias towards Australian shares and away from ETFs and international shares.
Thirty per cent of investors stated they didn’t know enough about overseas markets to invest and 17.2 per cent said they didn’t know what to invest in.
“Many investors are likely to say they gain their international equities exposure through Australian stocks with global operations,” said Mr Saiz.
The report also found that around two thirds of respondents hadn’t heard of any listed ETF providers.
Vanguard was the most recognised ETF provider, followed by BlackRock and iShares.
The most common reason for not investing in ETFS was not knowing what they are, followed by not knowing enough about them.
High-risk profile investors were also the most likely to purchase new investment products. While overall only 17.3 per cent intended to purchase a new investment product, the proportion of high-risk investors intending to purchase new products was much higher, at 32.1 per cent.
Forty-seven per cent of high-risk investors planned on reinvesting in existing investments, while only 34 per cent of moderate investors and 22.1 per cent of conservative investors planned to do so.
