Local retail investors outpace global peers in discipline and diversification: study

Gen Z investors allocate capital monthly, outperforming both Gen X and Baby Boomers in the city-state.

Singaporean retail investors are considered more mature compared to their global counterparts, with their high levels of engagement, disciplined portfolio construction, and greater diversification and macroeconomic awareness.

The latest quarterly Retail Investor Beat from eToro saw that 79% of 1,000 local retail investors surveyed said they are actively reviewing their investments and 83% investing regularly every month, versus 70% and 79% of retail investors globally. 

Amongst generations, the younger ones show the highest rates of active engagement. The study said that 92% of Gen Z and 88% of millennials allocate capital into the markets each month, compared to 78% and 79% of Gen X and boomers, respectively.

Singaporeans also allocate 10% of their monthly income to investing on average, higher than the 8% recorded globally.

“There’s definitely a strong awareness around compounding, making each dollar count, or just simply ‘maximising the ROI’ for every dollar. When those habits carry into adulthood, investing regularly and spreading money across different assets feels like a natural extension of how finances have always been managed,” said eToro Market Analyst Zavier Wong.

The eToro survey also showed that Singaporean retail investors are broadening their portfolios across asset classes more than retail investors globally. The number of local investors holding domestic and foreign equities, real estate, domestic and foreign bonds, cash assets and currencies, beats the global retail investor average.

When it comes to macroeconomic awareness, eToro said the city-state’s retail investors are reassessing the role of traditional defensive assets, with 63% saying they have already adjusted or plan to adjust their portfolios as the US dollar weakens.

“Retail investors in Singapore engage with macro shifts in a very practical manner. Currency movements matter to them because they sit close to their everyday financial decisions,” Wong said.

“However, what really stands out is how diversified Singaporean investors already are – far more than the global average across most asset classes – which gives them more flexibility when macro conditions shift,” the expert added.

Since they have better exposure across different asset classes and geographies, Singaporean investors are better positioned to reassess traditional defensive plays as the US dollar weakens, Wong said.