More Kiwis are opting to put their spare cash into savings instead of the share market, with new Sharesies data showing retail investor confidence has dropped to its lowest level since late 2024.
Sharesies tracks how its more than one million customers in New Zealand and Australia invest. Its confidence score fell from 57 at the end of June to 31 in late September, on a scale where 100 is the most confident.
Sharesies wealth general manager Scott Nixon told BNZ Business Breakfast that customers had become more careful, but were not giving up on the sharemarket. (Source: Breakfast)
Compared with the previous three months, people put far more into savings accounts for every dollar they spent on shares and funds, although they still invested more than they saved overall.
That savings measure jumped 88% and hit its highest level in two years in early September.
Rates tempt savers
Sharesies Wealth general manager Scott Nixon said customers had become more careful but were not giving up on the sharemarket.
"Our customers were cautious but not deterred. They adjusted. Some took advantage of higher interest rates by directing more into savings. Others rotated toward global exchange-traded funds (ETFs) to reduce concentration risk."
Nixon said many people were doing both at once.
"The 88% increase in savings activity isn't a flight from markets, it's a reallocation. Many of our customers are doing both: keeping their investment portfolio intact while directing new money into savings at higher rates."
Waiting on the vote
Sharesies said high oil prices caused by global tensions, doubts over the value of AI and tech companies, and the upcoming general election on November 7 had likely affected how investors felt.
Nixon said election periods typically caused a natural pause.
"Investors want to understand the policy environment before making significant new commitments."
Despite the drop in confidence, customers kept adding money to the platform. On average, they deposited just over $2 for every $1 they withdrew during the quarter.
They also kept buying more than they sold.
Fewer people bet on individual companies. The share of money going into single stocks fell from 72% to 68% as investors moved into funds that spread their money across thousands of companies around the world.
One of those, the Vanguard Total World Stock ETF, climbed 15 places on Sharesies' list of its 50 most widely held investments. The company said this was the biggest jump it had recorded in a single quarter.
Fonterra Shareholders' Fund entered the top 10 for the quarter after its share price rose 18%. Sharesies put the rise down to strength in the rural and farming sectors.
A US sharemarket fund, Smart US 500 ETF, remained the most widely held investment on the platform, followed by Rocket Lab and the Vanguard S&P 500 ETF. Air New Zealand slipped one place to fourth.
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