Volatility tempers online investment

Online investment activity has declined in Australia amid what appears to be faltering investor sentiment, according to the latest data from Investment Trends.

But amid the declining sentiment, Bell Direct, CMC Markets Stockbroking and CommSec have the highest client satisfaction ratings.

The number of active retail stock market traders decreased to 605,000 (from 635,000 in November 2015), while some traders only placed one trade in 12 months, the survey found, prompting Investment Trends senior analyst, Irene Guiamatsia to point to the number of people who had simply halted their trading activity in the past six months.

"Global market volatility continues to weigh down on investors' outlook for domestic equities," she said. "As a result the healthy client inflows that the industry continues to witness were not enough to compensate for those who decided to halt their trading activity in the past six months."

Investment Trends' monthly Investor Intentions Index showed the level of capital growth online investors expected from domestic equities had followed an erratic see-saw pattern over the past few months, making it increasingly difficult to forecast the next move.

It said average return expectations (exlcuding dividends) stood at one per cent in January, rebounded to four per cent off the back of the May market rally, but had already dwindled again post-Federal Election to two per cent.

ANZ Share Investing rebrand from E*TRADE, was most noted as the biggest event that occurred over the last six months.

"ANZ Share Investing brings powerful bank backing to the E*TRADE platform. As a result, the pressure is high for ANZ to deliver flawlessly on customer expectations," Guiamatsia said.

The number of investors who switched between brokers remained low at four per cent, which meant that any broker who was looking to attract clients from a competitor had a hard battle on their hands, she said.