Online investment platform Sharesies said investor behaviour had changed in the past year or so. Photo: 123RF
Ongoing economic uncertainty and stock market volatility are keeping the largest do-it-yourself investors on the sidelines, waiting for the sharemarket to hit bottom.
Online investment platform Sharesies, which has more than half-a-million users and some $2 billion of funds invested, said investor behaviour had changed in the past year or so.
Founder and co-chief executive Leighton Roberts said small shareholders with automatic contributions had continued to invest on a regular basis, but those used to making larger investments were taking a wait-and-see approach.
"The other thing we've seen is a move to funds so, not so much more risky technology companies that were very popular a year or so ago, more interest in exchange traded funds," Roberts said.
"So, whilst we're still growing, we're not seeing some of those bigger volumes that came through previously. We've just seen the more regular, consistent ones."
He said the change in investor behaviour was anticipated given rising inflation, interest rates and the increasing risk of recession.
"We think there's still some impact to the economy to come."
He said the company had recently shed some staff in the face of the economic downturn, but continued to hire tech staff and others with the skills necessary to help Sharesies manage the regulatory environment ahead of its launch of a KiwiSaver business later this year.
"So we've sort of made those changes now and feeling much better and much more optimistic about the times ahead."
He said about 17,000 people had registered to join Sharesies KiwiSaver, which would initially offer investments in indexed funds.
In the meantime, he said regular investors continued to invest and were far more savvy about investments than they used to be.
However, he said fewer investors were looking to buy shares on dips in prices, which was a feature of trading during the height of the Covid-19 pandemic.
"They're waiting for the bottom, or a sign that it's there, or a sign that it's going to turn, particularly those larger investors waiting to come back in again.
"But as I say, the people who just do the regular auto-investing - they're still in and are actually growing, so more people opting for that method of investing.
"I think that's a positive sign for New Zealand and the economy."
