Multi-asset and social trading broker eToro has published details of the latest results from its regular retail beat survey. eToro’s retail beat survey canvases 10,000 self-directed investors and traders across 13 markets around the globe, in order to find out what they are thinking about the stocks and other assets they are trading and what their concerns are for the future.
Highlights:
- Investors remain confident despite worrying about the recession
- Investors see cryptocurrency as the asset class they want to grow the most
- US shares and markets are still seen as the most attractive
What was on the trader’s mind?
Foremost in the minds of the traders surveyed was domestic recession risk with 22.0% of the group highlighting as their biggest concern. Europe is seen as the most likely candidate for a recession, that’s not helped by a sluggish recovery in China.
Interestingly only 13% of the traders voiced concerns about inflation as their number one risk, and only 8% highlighted geopolitical conflict as being the top issue.
Other areas of concern include the level of Interest rates, higher taxes and national debts.
In terms of the most popular assets the retail traders are most bullish on the US stock markets with almost a quarter saying that they believed it had the best prospects.
18% picked European markets, whilst 14% went with the emerging markets as having the best prospects going forward. Another 11% of the traders specifically picked out China.
Contrarian thinking among the traders
That’s something of a contrarian trade idea, with the Hang Seng Index down by -12.30% year to date and the Shanghai Composite Index barely in positive figures in 2023 so far.
Elsewhere in Asia Japan is seen having the best prospects by just 5% of traders, although the world’s third largest economy did beat out both the UK and Australia with only 4% of traders opting for these markets as their top picks.
Some 15% of traders are expecting to prioritise trading information technology stocks during Q4 2023.
We can also detect further evidence of that contrarian streak among the traders as 11% picked out Financials, as the sector they will be looking to, in the final part of the year.
The S&P 500 financials sector is down -2.90% year to date. That contrasts strongly with Europe, where the Bank and Insurance sectors are up by 14.70% and 10.80% respectively during 2023.
Other areas of interest to the traders include the Healthcare, Utilities, Energy and Real Estate sectors which all polled 9.0% each.
What about alternative assets?
When it comes to alternative asset classes Crypto was top of the trader’s picks with 15% of the group saying that they would increase their investment into digital assets during Q4 2023.
Crypto edged cash into second place with only 13% of traders saying that they would be increasing their weighting to cash into the year end.
9.0% of the traders said they would increase their investment in commodities, whilst 7.0% picked out domestic bonds, and a further 6.0% of the group opted for currencies and FX.
Increasing numbers of retail investors
eToro found that the number of retail investors continued to grow and that ease of investing and lower costs were key drivers here.
As was the move to self-determined investing by younger cohorts.
Almost a quarter of the traders surveyed by eToro had only started investing in the last two years, and interestingly this group was led by clients from Eastern Europe and women.
The number of female retail investors has grown by 28.0% in the last two years according to the eToro data vs. 20.0% growth for men in the same period.
Female investors are more likely to take a passive approach to the markets, whereas male investors favour active stock selection.
These kinds of data insights are always useful and they can help to confirm or deny trends and patterns within investor behaviour.
What would be even more intriguing, however, would be to discover if, come early 2024, the traders had invested as the survey suggested they would.
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