Five trends shaping investment markets

3 min read

Article first published in BOSS Magazine

There's plenty happening in capital markets and investors are focused on global trade, the interest rate cycle and equity market opportunities, says Kathy Vincent, BT's General Manager Platforms, Investments & Operations.

Savvy investors are also taking into account a number of macro trends that are playing out against this backdrop. 

Responsible investing becomes mainstream

A growing cohort of Australians wants to know their investment funds are contributing to a better future. This is why more people are looking at assets with sound sustainability credentials, with the BT Australian Financial Health Indexshowing 90 per cent of us believe sustainable investing is important.

According to the most recent Global Sustainable Investment Review2,, 63 per cent of total assets under management across Australasia use a responsible investment approach.

Australians love trading shares

Our online share trading data shows online trading is at peak levels, with volumes at a five-year high. This is driven by increasing volatility, rising equity markets and low returns from fixed interest assets.

It’s worth noting average monthly trading values are now 26 per cent greater compared to the same period in the previous five years.

Three sectors with traction

More than half (55 per cent) of all holdings in our online trading platform are in the materials, financials and healthcare sectors.3

In a low interest rate world, investors across our trading and investment platforms are hungry for yield, reflected in investor appetite for stocks with high dividends, including in the banks, telecommunications and materials sectors.

A whole new world with ETFs

Australians’ portfolios have traditionally been skewed to domestic investments. But increasingly, investors are exploring overseas investments.

Investors are gaining this exposure through exchange-traded funds, which offer access to a breadth of investment opportunities, in a cost-effective way. Overseas ETFs are also a great way to diversify a portfolio.

More engagement with our investing future

The final trend, and one of the main trends we’re seeing on our investment platform, is that people are seeking more control over their investments, evidenced by investors’ growing appetite for greater transparency.

This is driving demand for transparent, tax-efficient managed accounts. Clients investing through an investment platform are entitled to any income from the underlying assets in their managed account and receive professional investment management according to their strategy preferences.

Learn more about how BT can help you prepare for today and tomorrow. 

1  BT consumer research, August and September 2018, undertaken by fiftyfive5.
2  Global Sustainable Investment Alliance, Global Sustainable Investment Review, 2018 (Released April 2019).
3  Westpac Online Investing, trading volumes for May, June and July from 2015 to 2019.

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