Robo advisers win over more women
Robo advice is seeing greater popularity and engagement with women online investors across the world, according to a recent Investment Trends study.
Surveying more than 20,000 online investors across Australia, the US, the UK, Spain, Germany, France, Singapore and Hong Kong, the researcher found 29% of women in the US use robo advisers compared with 22% of men. In Australia, women online investors are more likely to consider using robo advisers than men (40% versus 36%).
Recep Peker, research director at Investment Trends, says robo advisers that intend to satisfy the strong demand from women will do well.
“When selecting a robo advice provider, women online investors are more likely than men to prioritise the user interface (55% versus 49%) and education initiatives (40% versus 34%), but are less likely to focus on fees (41% versus 53%),” says Peker.
While Australia remains behind established markets like the US when it comes to the adoption of robo advice, providers like Raiz, a micro-saving and investing app, have gained significant traction with more than 200,000 active customers nationwide.
“Raiz’s popularity highlights the appeal of micro-savings functionality among Australian investors. For other robo advice providers, brand awareness appears to be an issue, with less than 12% of Australian online investors saying they are aware of providers like Stockspot, Spaceship Voyager, Clover or Six Park,” says Peker.
“Nonetheless, there is significant scope for growth, with 38% of Australian online investors considering using robo advice in the future.
“The recent launch of solutions like CommSec Pocket and Vanguard Personal Investor gives Australians greater access to low-cost, diversified portfolios.”
BlackRock, the largest fund manager in the world, downgraded its position in US shares to neutral in early July. This means it doesn’t see any major increase or decrease in US shares for the next six to 12 months, and some of its investment portfolios will be adjusted to suit.
A research paper filed by the BlackRock Investment Institute on July 6 says US shares have had a strong run, but this is likely to slow amid surging Covid-19 cases and risks of financial stimulus fading.
“The resurgence of Covid-19 cases in the US threatens the restart of [economic] activity, and has prompted us to downgrade US equities to neutral over our six- to 12-month tactical horizon,” it says.
BlackRock, which manages more than $US7 trillion ($10 trillion) globally, says the general quality of companies in US sharemarkets meant it wasn’t prepared to downgrade its investment position to negative.
“US stocks have outperformed in 2020, with a sharper recovery from the troughs of late March. This follows a multi-year stretch of outperformance of US equities, driven by strong earnings growth as well as investor preference for tech and quality stocks,” it says.
“We now see a risk of more muted performance in line with global equities. New Covid-19 cases in the US have been surging. This is potentially setting the US on a very different activity restart path than most western countries and much of Asia.”
Whether or not US state governments reimpose lockdowns, individuals may respond by reducing their mobility. BlackRock views mobility as an indicator of activity as economies restart, and a failure to contain the virus will threaten the US restart.
“We prefer European equities, which we have upgraded to a tactical overweight. The region offers more attractive cyclical exposure than emerging markets due to its public health measures and ramped-up policy response, in our view.”