Daily Newsletter

01 September 2023

Daily Newsletter

01 September 2023

Retail investors are shifting strategies and prioritising AI

A new report finds that retail investors in 2023 are diversifying their portfolios, adopting new research strategies, and prioritising investments in AI.

Claire Jenns August 31 2023

New research from the investing platform Public has surveyed more than 2,000 retail investors and reviewed investing flows on its platform across 2023.

According to the findings, this year more investors are focusing on due diligence and research, using artificial intelligence to inform investment decisions and diversifying into fixed-income products.

Investors continue diversifying across asset classes, with megatrends and cultural moments sparking the discovery of new investment strategies and opportunities.

Cultural buzz, positive and negative, translates into newly converted retail investors. The total number of investors in Mattel increased 6.6X following the success of "Barbie," and the total number of investors in Bud Light's parent company Anheuser-Busch InBev increased 1.5X despite controversy beginning in April 2023.

How are retail investors approaching AI?

AI is a disruptive technology in the retail space and GlobalData notes its importance in the evolving retail ecommerce landscape.

Retail investors are increasing their focus on due diligence and closely vetting sources for trust and credibility. Nearly one-fifth of retail investors surveyed say they are already using AI for investment research.

AI thematic exchange-traded funds (ETFs) saw a 34% YoY increase in net new investors while 19% already use AI for investment research.

Most holdouts are attributed to investors being interested in learning how to leverage AI to inform their portfolio strategies.

The growing role of AI in investment research is balancing social media as a primary channel for decision-making, as 16.4% of investors say social buzz is an 'important signal' in their decision-making. However, far fewer cited it as the most important signal.

How do retail investors view the current economic climate?

Retail investors are entering the remainder of 2023 with confidence. However, the economic outlook is mixed as 59.9% of retail investors are optimistic or neutral about the economy and 40.1% are pessimistic.

They are also grappling with their roles as shareholders and are divided on the importance of ESG. A little more than half (55%) of investors represent anti-ESG sentiment and 45% represent pro-ESG sentiment.

GlobalData's thematic intelligence emphasises the importance of ESG for retailers and investors as consumers, governments, regulators and the media are turning the spotlight on corporations and demanding action.

APAC duty-free market expected to grow fastest, fueled by rising income levels and international travelers

Per latest GlobalData estimates, the global duty-free market retailing market was valued at $49 billion in 2022, its highest level ever as it bounced back from the pandemic impact, and is expected to grow at a CAGR of more than 28% during the period 2020-2026, driven by government initiatives, rising passenger numbers, major global events (for instance global sporting tournaments) and the renewed popularity of cruise trips. Infrastructure investments will also play an important role, particularly airport expansion and space refurbishment, and investments in arrivals duty-free formats.

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