Investors have continued to cut back on share ownership, both directly and through managed funds, according to an ASX survey released today.
The survey, conducted every two years, revealed that more than half a million people, or almost 3 per cent of the adult population, walked away from stock ownership between 2010 and 2012. The exodus from equities reinforces the notion that the global financial crisis of 2008, when some shares lost 40 per cent of their value, had left a lasting impact on individuals’ appetitive for the investment class.
The survey does not cover shares owned by superannuation funds, though which almost everyone of working age would have some exposure to stocks. It does, however, include the shares owned by the almost one million members of self-managed super funds, which account for close to a third of the nation’s $1.5 billion superannuation pie.
ASX’s survey of 3000 Australians found that direct share ownership, which peaked at 44 per cent in 2004, dropped from 39 to 34 per cent in the two years between 2010 and 2012. Total share ownership, which includes managed funds, peaked at 55 per cent in 2004 and dropped back in the last two years from 43 to 38 per cent.
One of the biggest losers in the survey was the managed funds industry, which copped a shellacking through the GFC for the fact that its charges were in many cases out of line with the indifferent performance provided by fund managers. The percentage of investors who had equities exposure through managed funds fell from 32 per cent in 2004 to only 12 per cent in 2012.
The survey concluded that a lot of investors had decided that they may be able to do better as investors by going direct and not paying a manager.
”Many investors articulated a desire to be more in control of performance, or lack thereof, and to not pay high fees for indirect shares,’’ the survey found.
The biggest group of people to own shares directly was, unsurprisingly, higher income households, with 58 per cent of those with annual household incomes above $200,000 being direct shareholders.
The honour of being the most directly invested state was shared equally between Western Australia and the Australian Capital Territory, where 45 per cent of the adult population owned shares in some form. This compared to Queensland, with only 26 per cent.
After shares, the most popular investment class was residential property, in which 22 per cent of Australia’s adult population had invested in some way.
