Self-directed Investors' Risk Appetite Returning To Pre-gfc Levels: Report

InvestSMART report

Self-directed investors' risk appetite returning to pre-GFC levels

Key findings:
*Demand for managed funds is up by 29% year on year, following two consecutive years of significant falls

*Demand for equity based funds has recovered steadily, rising 30.1 percentage points from the lowest level in March 2009

*Interest in Cash and Property based managed funds has fallen below pre GFC levels

*Australian Equity funds are seeing the most demand, having overtaken International Share funds

InvestSMART Financial Services' Quarterly Managed Fund Investment Indicator has found demand for managed funds is up by 29% year on year, while investors have shown a move away from favouring defensive asset classes, such as Fixed Interest and Property, in favour of Shares.

The report tracks self-directed investors' investment intentions, analysing the Product Disclosure Statements (PDS) requests of over 1,200 managed funds available through InvestSMART and comparing demand on a quarterly basis.

Findings from the March quarter indicated that total interest in investment activity dropped off slightly, while investor interest was up by 29% year on year, following two consecutive years of falls in the numbers of PDS's requested.

Interest in specific asset classes has shifted only slightly in the March quarter, but year on year changes were considerable.

The most significant shift in investors' appetite was the movement away from traditionally defensive asset classes, with interest in Fixed Interest funds falling 23.4 percentage points from its highest level in March 2009 and Property funds falling 14.3 percentage points from its high in September 2008.

While interest in Shares, both domestic and international, is still under the levels seen prior to the Global Financial Crisis (GFC), the big jumps in interest seen in the June and September 2009 quarters have been maintained, with interest levels rising 30.1 percentage points from its lowest level in March 2009.

Interest for Australian and International Equity funds, as the proportion of overall downloads of PDS's, has reversed since September last year, when 34% were for Australian Equities and 51% were for International Equities. In the March 2010 quarter, 53% were for Australian Equities, and 31% were for International Equities.

Michael Roberts, Commercial Manager at InvestSMART said, "The findings of this quarter's report show self-directed investors are following asset allocation strategies characteristic of fluctuating markets. This is evident in the analysis of the past 2 years of PDS downloads, which show investors moving from growth to defensive funds, then back again as the affect of the economic downturn subsided and investor confidence returns."

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For more information please contact:
Brodie Neader or Sally Barwell
evolution media for InvestSMART
p: +61 2 8969 6077
m: +61 411 588 841;
+61 431 932 198
e: [email protected];
[email protected]

About InvestSMART
InvestSMART Financial Services Pty Ltd is one of Australia's leading online discount fund brokers, with more than 190,000 registered users and covering more than 3,000 managed funds and investment products.

The InvestSMART library includes research and results from a broad mix of retail investment products, including Cash, Property, Shares and Managed Funds. InvestSMART also monitors and distributes news of upcoming market floats and IPO's. See www.investsmart.com.au.

About the InvestSMART Managed Fund Investment Indicator
The InvestSMART Managed Funds Investment Indicator offers an insight into the investment intentions of self-directed investors, through tracking the demand for Managed Funds offered on the InvestSMART website.

The report analyses the PDS requests of over 1,200 Managed Funds available through InvestSMART and compared demand on a quarterly basis.

Funds have been classified by asset class with International Shares representing 41% of funds, Australian Shares 32%, Global Fixed Interest 14%, Australian Fixed Interest 5%, Cash 5% and Australian Property 2%.

Self-directed investors are an important segment in the retail market. Their behaviour has a significant influence on funds flows and will be of interest to funds managers, brokers and investors alike.

SOURCE: InvestSMART