Everyone knows I hang out on the InvestNow platform and website quite a bit. I log onto their website every month to look at how my investments are doing. And from time to time I’ll have a look around their website. They have quite a lot of good resources and even an articles page which makes for interesting reading every now and then.
Recently I rediscovered their LikeMe tool, which allows you to see what other users on the InvestNow platform are investing in. It uses real data from InvestNow Customers- but only ones that have given consent. You can sore them into age groups, investment time frames and investment goals- it also shows you what funds they are investing in. It’s a bit of fund- also gives you a bit of insight into what others are doing. I’d recommend having a look around.
Primary Investment Goals
A primary investment goal is something that we should all have. It’s the reason we are hoarding money under the mattress so to speak. We don’t just invest for the sake of investing- at least I don’t. We all have different goals. You could say that my goal is to generate income so that I can retire early. The tool on the InvestNow platform has 7 primary investment goals to choose from. They are;
- Retirement
- Generate Income
- Education Fund for Child
- Property Purchase
- Emergency/Rainy Day fund
- Travel
- Other
And below is the primary investment goals of the 1724 people who share their data through the InvestNow Like me tool.
The majority of investors are investing for retirement, followed by generating income. For me, it’s a bit of both. My investments are for retirement, but if they can generate income, then I can retire earlier than the government assigned retirement age of 65.
Investment Horizon
Along with our investment goals, we need an investment horizon. For me still being relatively young, my investment horizon is greater than 10 years. So how does the mix of horizons look like on the InvestNow platform?
The largest group of investors are investing for a 5 to 10-year retirement, I hope they are not heavily invested in shares. The second group is 11 to 20 years. I probably fall into this group as well, or possibly even longer given I’m still 35 years from the typical retirement age.
Investor Age
The distribution of investor ages is also very interesting. As we get into investing, the one common regret that we have is that we’d wished we started earlier in life than we did. I’d loved to have started earlier, but at that time, I didn’t really have any extra money to invest. I started in 2013 when I was two years into my working life. I’m pretty happy about that.
It’s nice to see that the largest age group sharing their data on the like me tool is in the age group of 21 to 30 years. I’m not sure if that is reflective of the actual makeup of investors on the platform, or that people in this group are just more comfortable to share their data since we grew up in the social media age.
Portfolio Size
Looking at the distribution of portfolio size can lead to some feelings of envy if you look at it from a certain angle, but it can also be a source of motivation. Just look at how well some people are doing. No doubt, many of them have been investing for a long time. And one day you will be there too. You just have to keep at it.
Popular Funds
Not only does the data give us information on age, investment goal, time horizon, and portfolio size, it also shows the funds that they are invested in. I found it quite interesting to have a look at what other people were investing in. Now it would take me a lot of time to collate all the data but I decided to collate similar investors to me. That is someone who is between 21-30 years, with the aim of generating income and retiring with any timeframe greater than 5 years and any portfolio size.
So let’s look at popular funds and the percentage of portfolios which held them.
Australasian Shares
The top 5 Australian share funds were;
- Smartshares – NZ Mid Cap Fund: 19%
- Nikko AM Core Equity Fund: 13%
- Smartshares – NZ Top 50 Fund: 13%
- Harbour Australasian Equity Fund: 10%
- Fisher Funds New Zealand Growth Fund: 10%
Nice to see the Smartshares NZ funds being very popular given that they are passive and have a reasonably low fee.
International Shares
The top 5 International share funds were;
- Vanguard Intl Shares Select Exclusions Index Fund – NZD Hedged: 13%
- OneAnswer Single Asset Class International Share Fund: 10%
- Smartshares – US 500 Fund: 9%
- T. Rowe Price Global Growth Fund: 8%
- Smartshares – Europe Fund: 7%
- Vanguard International Shares Select Exclusions Index Fund: 6%
Interesting to see that the hedged Vanguard fund was more popular than the un-hedged fund. Either way, both are low fee, passively invested. As is the Smartshares US500 fund.
Listed Property
The top listed property funds were;
- AMP Capital Global Property Securities Fund
- Salt Enhanced Property Fund
- OneAnswer Single Asset Class Property Securities Fund
- AMP Capital Australasian Property Index Fund
I don’t know a lot about many of the other property funds on InvestNow- I invest in the AMP Capital Australasian property fund for its low fee. Many of the other property funds have fees of around 1% if I remember rightly.
Fixed Interest
The top fixed interest funds were;
- Nikko AM NZ Corporate Bond Fund
- AMP Capital NZ Fixed Interest Fund
- Fisher Funds Income Fund
Although Nikko will not be on this list anymore as they have removed their funds from the InvestNow platform.
Summary
Although this data is interesting to play with it doesn’t really tell us anything about the typical NZ investor.
From this data, you might think that the typical investor is between 41 to 50 years, has a 5 to 10-year investment timeframe, is investing for retirement with a portfolio of <$49,999. But that’s not how statistics work.
Beyond the shotty statistics of the comment above, the data is not complete- It’s only the data from InvestNow customers who have to give consent for their data to be made available. This could introduce some sort of bias into the data.
What this data has shown me is that there isn’t really a typical investor at all. Everyone has different investment goals, different investment horizons, different portfolio sizes and different ages. And that’s the way it should be. We are all different. Maybe with a larger sample size and a complete data set, a typical investor may emerge.
If you were to say that there is a modal investor it would be a 51 to 60-year person, investing for retirement with a time frame of 5 to 10 years and a portfolio of $500,000 to $999,999. Of all the InvestNow customers who consented their data to be made available, 4.5% fell into this category- which was the largest group.
Followed by a 21 to 30-year person, with the aim of generating income in 5 to 10 years time and a portfolio of <$49,999 coming in at 4%.
And in third place- a 21 to 31-year old investing for a property purchase in less than 5 years and <$49,999 invested at 3%.
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