All strategies work – until they don’t. While the hottest ticket in town is still private credit, is it everything it’s cracked up to be?
In Cliff Asness’ latest missive, a fictional asset allocator from the future looks back on the decade to 2035 to figure out which assets helped their performance and which hurt it.
Share ownership slips, especially in managed funds
Share ownership by Australians has continued to slip, sitting at 36 per cent of the adult population at the end of 2014, compared with 38 per cent in 2012, but most of the slippage has been in “indirect ownership”, through a decline in the use of unlisted managed funds, rather than direct shares.
The latest share ownership study by the ASX, published last week, confirms the decline in sentiment to unlisted managed funds, but interestingly, this is more commonplace among smaller less sophisticated investors. The average investor’s portfolio was $112,000 at the end of last year and about 10 per cent of this was traded during the two years since the previous study.
Within the total shares category (direct plus indirect), two of the trends were an uptick in investing in international shares, from 10 per cent of shareholders to 13 per cent, and an increase in ‘other’ listed investments from 4 per cent to 5.6 per cent. These are mainly REITs, options, ETPs and LICs. With international shares, the percentage peaked at 19 per cent in 2006. The bottom was 7 per cent in 2002 after tech-wreck.
The study of retail investors includes direct and indirect share ownership through various structures, including SMSFs, but excludes the great bulk of ordinary workers who own shares through an APRA-regulated super fund. This is the 14th study in the series, which dates back to 1991.
Unsurprisingly, share ownership rises with education levels and household incomes. City dwellers and males are more likely to own shares than country folk and women.
A survey of 6,400 adults for the study found that 54 per cent of direct investors said they were likely to buy shares in the next 12 months, while only 12 per cent of indirect investors said they were likely to. The study points out, though, that this 12 per cent still reflected 1.45 million people.
Other notable findings include:
> Australia has one of the highest levels of share ownership in the world – more than the US and UK and about the same as Hong Kong.
> More investors trade online (58 per cent) than through a broker or advisor (31 per cent), reflecting the growing desire of investors for self-direction and control over investments, the study said.
> Investors learn from other investors, with advice from friends, family and colleagues (38 per cent) cited as a higher source than reading and/or listening to expert commentators in the media (32 per cent).
> A total of 2.5 million non-investors said they were very keen to invest in the sharemarket but had little knowledge of how to go about it, were confused by all the information, and, if they were to invest in shares, would rely on expert advice.
