The COVID-19 pandemic has spawned a new breed of retail investors, of whom many are from emerging markets, relatively younger but with less money at their disposal, transacting remotely and keen on digital assets.
In the latest Global Retail Trends Report covering the first quarter of 2022, New Jersey-based DriveWealth LLC said the pandemic spurred a new phenomenon that ushered in “huge swaths” of new players that redefined what an investor is.
The latest quarterly report is based on a survey of retail investors across 23 countries, including the Philippines.
“This new paradigm of investing is being driven by factors that are breaking down the traditional barriers to investing,” DriveWealth chief executive Bob Cortright said in a statement.
“Embedded finance platforms are making the markets more accessible than ever before, with mobile technology making it easier for investors of all ages to tap the markets from the comfort of their own homes,” said Cortright, referring to the use of financial technologies and services by nonfinancial players.
The study found that lockdowns and working remotely resulted in “remote investing” not only in advanced markets but in emerging markets as well. In the Philippines, 48 percent of respondents belong to this new generation of investors or those who started out after the onset of the pandemic—well above the global average of 35 percent. Many among these new investors have less than $10,000 at their disposal and, among Filipinos surveyed, 39 percent were motivated by their ability to start with a small amount.
Also, more than half of Filipino respondents opened their most recent investment account via a mobile app or through a smartphone, and 30 percent made their first investment in a digital asset.
The study found that regardless of available technology, in 18 of 23 markets surveyed, the most common motivation to start investing was low account minimums.
“The ability for providers to offer fractions of stocks has been one of the most significant evolutions in trading because it’s giving investors the power to enter the markets using small, yet meaningful, amounts,” DriveWealth chief information officer Harry Temkin said.