Hatch Investment Landscape Survey June 2019 ha PERCEPTIVE Contents 1. Key Insights 2. Investment and Money Personalities 3. New Zealand’s Investor Landscape 4. Behaviour and Attitudes Around Shares and ETFs 5. The Role of Social Investing 2 Methodology Perceptive conducted an online survey targeted at New Zealanders over the age of 18 using a nationwide sampling framework. The results were then weighted to Statistics New Zealand census gender, age and location data to achieve a nationally representative sample. The survey collected n=1,500 responses, all of which have been analysed and presented within this report. 3 01 Key Insights i hatch PERCEPTIVE Attitudes Towards Thematic and Social Investing Social investing is the primary driver of investment decisions (over the investment return) for over a third of New Zealanders (37%). • This is strongest among Non/Non-Engaged Investors (42%). • The most popular themes to invest in would be Healthcare, Technology and Renewables. • Awareness of different types of social investing is low (67% weren’t aware of any types tested). • Technology themes are particularly popular among millennials (47%). Responsible investing is the most preferred type of social investing (25%). Social investing is more likely to be a consideration for millennials (81%) and women (72%). While thematic investing ranked as one of the less popular investment strategies overall, it performed reasonably well among males (41% of males selected 5 thematic investing in their top 3 most appealing ways to invest). • Returns however, are still the primary driver of investment decisions (over social implications) for the majority in both groups. New Zealanders’ Preferred Investment Strategies Investing in brands New Zealanders know and love ranked as the third most popular way to invest (50%) and the most common way New Zealanders have invested previously (22%). • The key brands these New Zealanders would want to invest in are Apple, Microsoft and Google. Goal-based investing is appealing to 80% of the population. • Millennials in particular find goal-based investing popular. A self-service/DIY platform is the most appealing way to invest for three quarters (72%) of those who found at least one strategy appealing. • This is also the most common way New Zealanders invest currently with self-managed assets making up 64% of the average portfolio. Human advice is the most appealing way to receive investment advice (over AI/digital) selected by 74% of New Zealanders and over-indexing among women (77%). • The human element creates a stronger perception of trust. 6 02 Investment and Money Personalities hatch PERCEPTIVE Money Personalities Investment and Money Personalities Description Future Planners are those who plan for their financial future. They understand their finances, have financial goals, know how much money they will need for retirement and avoid using credit cards or getting personal loans to buy consumer goods. 32%         33%         Findings • Around a third of New Zealanders are Future Planners. • Baby boomers (41%) and Engaged Investors (50%) are significantly more likely to be Future Planners. 35%         We asked a range of psychographic questions to understand how New Zealanders see themselves in relation to their money and investment habits. Future Planner Non-Future Planner Unclassified Investment Personalities Description Investment Savvy New Zealanders are those who have investments and try to diversify these across a range of asset classes. 39% Findings • 2 in 5 New Zealanders are Investment Savvy. • Women are significantly less likely to be Investment Savvy (34%) along with millennials (31%) and Non/NonEngaged Investors (12%). 61% Base: All (n=1,500) Investment Savvy 8 Non-Investment Savvy • Women are significantly more likely to be risk averse than males. New Zealanders’ Risk Profiles • Millennials are significantly more likely to seek risk than baby boomers. However, findings show that Gen X are the most aggressive risk-wise (24%). • Future Planners and Engaged Investors are more likely to be risk seeking. Q. On the scale below, please indicate where you sit regarding your feelings towards risk: Risk averse Neutral towards risk 50% Females 58% Risk seeking 33% Baby Boomers Engaged Investors 66% 27% 18% Future Planners Males Millennials 23% 24% 18% Base: All (n=1,500) 9 03 New Zealand?s Investor Landscape hatch PERCEPTIVE New Zealanders That Have Savings/ Investments • About 8 in 10 New Zealanders have investments or savings. Q. Do you currently have money invested / saved?* 15% • There are no significant differences across age and gender between those who have money invested/saved and those who don’t. • 96% of Future Planners have investments excluding the family home compared to 70% of Non-Future Planners. 85% Yes No Base: All (n=1,500) * For the purposes of this report owner occupied housing is not included as an investment 11 • New Zealanders most commonly have money invested in savings accounts and KiwiSaver. Where New Zealanders are Invested • Under a quarter of New Zealand investors have money invested in company shares (22%) and even fewer in ETFs (7%). • Under half of New Zealanders are Engaged Investors. Q. Which of the following do you have money invested / saved in? (Select all that apply) Savings account 70% KiwiSaver Term deposit 32% Shares in companies 22% Residential property investment 12% Government bonds 7% Shares in exchange-traded funds (ETFs) 7% Commercial property 4% Peer to peer lending, where you are the lender 4% Cryptocurrency 4% Another type of investment Engaged Investors 14% Unit trust or Managed fund Equity crowdfunding 47% 66% 2% 6% 53% Non/Non-Engaged investors Women (42%) and millennials (33%) are significantly less likely to be Engaged Investors. Base: All (n=1,500) Engaged Investors include those that have money invested in an asset class outside of KiwiSaver and/or a savings account while Non/Nonengaged investors include those who either don’t have investments or only have money invested in KiwiSaver and/or a savings account. Base: Investors (n=1,268) 12 Proportion of Portfolios That are Self-Managed Q. Thinking about your entire investment portfolio, please indicate the percentage that is self-managed/directed (as opposed to managed by another person/organisation) • Almost two thirds of the average New Zealand Investment portfolio is selfmanaged. NZ Investors Overall 64% • Engaged Investors, baby boomers, Future Planners and Investment Savvy New Zealanders are all more likely to have a higher proportion of self-managed investments. • Among investors without property (both commercial and residential) 62% of assets in the average portfolio are self-managed. 13 More likely to be self-managed Engaged Investors Baby Boomers Future Planners Investment Savvy 68% 71% 68% 67% Base: Investors (n=1,268) O4 Behaviours and Attitudes Around Shares and ETFs 1 hatch PERCEPTIVE Q. Which of the following do you have money invested / saved in? (Select all that apply) Investing in Shares and ETFs Q. Which of the following would you never consider investing in? (Select all that apply) Female vs. Male Shares in ETFs 1. Women are significantly less likely to be invested in shares in companies and ETFs and are also significantly less likely to be open to investing in both. 33% 10% 42% 5% Female Would never consider Investing in Invested In 31% Shares in companies Shares in ETFs Base: Investors (n=1,268): Males (n=624), Females (n=644): Millennials (n=371), Baby Boomers (n=439) 24% 13% 12% 5% 55% 7% Baby Boomers 15 23% 18% Male Millennials vs. Baby Boomers 14% 25% Shares in companies Key Insights 2. Millennials are significantly less likely to be invested in shares currently. However, they are significantly more likely to be open to investing in both asset classes. Would never consider Investing in Invested In 23% Millennials 05 The Role of Social Investing hatch PERCEPTIVE Influence of Socially Responsible Investing Q. Which of the following statements best describes you in regards to the tradeoff between socially responsible investing and investment returns? • Socially responsible investing is the primary driver of investment decisions for 37% of New Zealanders while it is a consideration for 79%. - Socially responsible investing is the main driver in my investment decisions regardless of the returns. In particular it is/would be a driver for investment decisions among Non/ Non-Engaged Investors (42%). • When targeting new investors, socially responsible investing should therefore play a key part in messaging. Socially responsible investing has a more significant impact on my investment decisions. However, I do take the returns into account. • No significant differences exist across age and gender. 21% Base: All (n=1,500) 26% Returns have a more significant impact on my investment decisions. However, I do take socially responsible investing into consideration. 42% 17 11% Returns are the main driver in my investment decisions regardless of whether my money is invested in a socially responsible way or not. Preferred Way to Invest vs. Ways People have Invested • When introducing other strategies of investing, social investing compares well as the preferred way to invest. However, not many people have invested this way before. • The most common ways people have invested previously is in brands they know and love and a fund that generates the highest return. • Investing in foreign share markets had the lowest appeal. Q. Below is a set of different ways people can invest. If you were considering investing, which of the following would be the most appealing? (Select the 3 most appealing options) Q. Which of the following ways have you invested previously? (Select all that apply) Investing in socially responsible investments 88% 15% 50% Investing in brands/companies I know and love 22% 50% Investing in a company/fund that generates the highest return Investing in a thematic or trend-based fund (e g technology, renewables, emerging markets) Investing in foreign share markets 16% 36% 8% 16% 13% None of the above Most appealing Base: All (n=1,500) 18 Previously invested this way 61% • Preferred Way to Invest Continued • Women are more likely to be driven by socially responsible investing, showing significantly higher appeal across the three types. - Foreign share markets, thematic investing and investments generating the highest return over-index among males. Millennials are more likely than baby boomers to be driven by the fund that generates the highest return. This shows that while social implications are highly important in the investment decisions of millennials this is more likely to be in conjunction with return based considerations. Q. Below is a set of different ways people can invest. If you were considering investing, which of the following would be the most appealing? (Select the 3 most appealing options) Female vs. Male Millennials vs. Baby Boomers 93% 83% Investing in socially responsible investments Investing in brands/companies I know and love 48% 52% Investing in a company/fund that generates the highest return 45% 54% 32% 41% Investing in a thematic or trend-based fund Investing in foreign share markets 11% 21% Female (n=781) Male (n=719) 19 87% 88% Investing in socially responsible investments 55% 42% Investing in a company/fund that generates the highest return 51% 50% Investing in brands/companies I know and love 34% 37% Investing in a thematic or trend-based fund Investing in foreign share markets Millennials (n=438) 21% 13% Baby Boomers (n=519) Thank you ho PERCEPTIVE