Investment Trends: Incl Impact Of COVID-19 - Canada - May 2020

Investment Trends: Incl Impact Of COVID-19 - Canada - May 2020

  • Mintel
  • May 2020
  • Banking
  • 0 pages

Report Description

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Current markets trends are seeing increasing interest in ESG investing, while the current COVID-19 world will witness a rise in thematic investing related to those sectors that will reshape the post-pandemic world.

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Table of contents

OVERVIEW
What you need to know
Key issues covered in this Report
Definitions
New Canadians
Regional classifications
Income
Glossary
EXECUTIVE SUMMARY
The issues
Impact of COVID-19
Figure 1: Short, medium and longer-term impact of COVID-19 on investing trends, June 2020
More than a third own mutual funds and around a quarter own stocks
Figure 2: Product ownership, February 2020
Brand and fees matter most when choosing an investment company
Figure 3: Reasons for choosing an investment company, February 2020
Around half interested in technology and industry-specific themes
Figure 4: Interest in thematic investing, February 2020
Fee transparency on top of investor wish list
Figure 5: Improvements in the investing experience, February 2020
The opportunities
Big banks have a brand and distribution advantage
Affluent more interested in thematic investing
Figure 6: Interest in thematic investing (select), by level of investments, February 2020
Moving towards better fee disclosure and lower costs
Simplifying information materials
What it means
THE IMPACT OF COVID-19 ON INVESTMENT TRENDS
Summary
Figure 7: Short, medium and longer term impact of COVID-19 on investing trends, June 2020
Opportunities and Threats
Offering reassurance
Figure 8: Vanguard investments, online advertisement, April 2020
ETF growth outlook remains strong
Donor-advised funds will continue to grow
Figure 9: Charitable Impact Instagram post, June 2020
The crisis will increase the popularity of ESG investing
Every crisis is an opportunity
 Figure 10: Fidelity investments mobile advertisement, April 2020
Market impact of COVID-19
Discount brokerages thrive as consumers move online
Figure 11: National bank discount brokerage mobile advertisement, April 2020
High-yield bonds face COVID-19 fallout
Moving towards better fee disclosure and lower costs
How the crisis will affect key consumer segments
Women are more likely to cut spending drastically
Affluent more interested in thematic investing
How a COVID-19 recession will impact consumer finances
Economic update
Figure 12: Canadian GDP, 2018 Q4 – 2020 Q1
Unemployment is a huge concern as GDP plummets
COVID-19: Canadian context
THE MARKET – WHAT YOU NEED TO KNOW
Financial market impact of COVID-19
Donor-advised funds
Socially responsible investing
The rise of thematic investing
COVID-19 impact on investment themes
THE MARKET – WHAT’S NEW?
Financial market impact of COVID-19
Figure 13: Worry about the risk of being exposed to COVID-19, May 11-15, 2020
Socially responsible investing
ESG and COVID-19
The rise of thematic investing
COVID-19 impact on investment themes
Donor-advised funds
KEY PLAYERS – WHAT YOU NEED TO KNOW
COVID-19 industry developments
High-yield bonds and mutual funds face COVID-19 fallout
World’s largest asset managers seek overhaul of leveraged ETF sales rules
New business and product launches
US investment bank Morgan Stanley launches wealth management business
RBC exploring building a cryptocurrency trading platform
KEY PLAYERS – INDUSTRY DEVELOPMENTS AND INNOVATIONS
RBC exploring building a cryptocurrency trading platform
Vancity announces Unity Term Deposit for COVID-19
Hub Financial partners with Nest Wealth
Mutual funds face flood of redemptions, some real estate funds halt redemptions
High-yield bonds face COVID-19 fallout
US investment bank Morgan Stanley launches wealth management business in Canada
Equitable Bank launches new USD HISA
Investor advocates seek overhaul of leveraged ETF sales rules
KEY PLAYERS – MARKETING CAMPAIGNS & LAUNCHES
Scotiabank, Tangerine team up with MLSE to feed healthcare workers, shelters
BMO thanks frontline workers
Figure 14: BMO | Thank you, April 2020
Tangerine goes with a positive post-COVID message
Figure 15: Tangerine’s Again, April 2020
Vexxit matches advisors to clients
Citi (US) unveils digital investment platform “Citi Wealth Builder”
Skimm'n in the Money (US)
THE CONSUMER – WHAT YOU NEED TO KNOW
More than a third own mutual funds and around a quarter own stocks
Brand and fees matter most when choosing an investment company
Fee transparency top of investor wish list
Around half interested in technology and industry-specific themes
Robo-advisors and cryptocurrencies appeal more to younger investors
Affluent are more engaged investors
PRODUCT OWNERSHIP
More than a third own mutual funds and around a quarter own stocks
Figure 16: Product ownership, February 2020
Age and gender influence ownership
Encouraging younger investors to invest
Figure 17: Product ownership (select), 18-44s vs over-45s, February 2020
Figure 18: Product ownership (select), by gender, February 2020
Chinese Canadians have a higher ownership of some products
Figure 19: Product ownership (select), Chinese Canadians* vs overall, February 2020
Using branches to sell investments to new Canadians
Figure 20: Product ownership (select), new Canadians* vs overall, February 2020
Around half of affluent own stocks directly
Figure 21: Product ownership, by level of investments, February 2020
Millionaires set themselves apart
Figure 22: Product ownership (select), millionaires vs those with between $500K and $1 million in investments, February 2020
CHOOSING AN INVESTMENT COMPANY
Brand and fees matter most
Figure 23: Reasons for choosing an investment company, February 2020
Big banks have a brand and distribution advantage
Older investors are more likely to be influenced by financial advisor
Figure 24: Reasons for choosing an investment company (select), 18-44s vs over-45s, February 2020
Affluent investors are more demanding
Figure 25: Reasons for choosing an investment company (select), by level of investments, February 2020
Men are also demanding
Figure 26: Reasons for choosing an investment company (select), by gender, February 2020
INTEREST IN INVESTING THEMES
The rise of thematic investing
Around half interested in technology and industry-specific themes
Figure 27: Interest in thematic investing, February 2020
Affluent more interested in thematic investing
Figure 28: Interest in thematic investing (select), by level of investments, February 2020
Figure 29: Interest in thematic investing (select), 18-44s vs over-45s, February 2020
Women more interested in ESG, men in other themes
Figure 30: Interest in thematic investing, by gender, February 2020
Considerable interest in ESG investing
IMPROVING THE INVESTING EXPERIENCE
Fee transparency tops investor wish list
Figure 31: Improvements in the investing experience, February 2020
Moving towards better fee disclosure and lower costs
High Canadian mutual fund fees remain an issue but robo-advisors are not capitalizing
Wish lists differ by age
Figure 32: Improvements in the investing experience (select), 18-44s vs over-45s, February 2020
Some gender differences also emerge
Figure 33: Improvements in the investing experience (select), by gender, February 2020
ATTITUDES TOWARDS INVESTMENT TRENDS
Robo-advisors
Figure 34: Attitudes towards robo-advisors, February 2020
Figure 35: Attitudes towards robo-advisors, by age and gender, February 2020
Cryptocurrencies appeal more to men and younger investors
Figure 36: Attitudes towards cryptocurrency, overall vs age and gender, February 2020
ATTITUDES TOWARDS INVESTING
Two in three prefer funds offered by big banks
Figure 37: Attitudes towards investing, February 2020
Most investors agree that exchange-traded funds are here to stay
ETF growth outlook remains strong
Figure 38: Attitudes towards investing (select), by level of investments, February 2020
More than half hold different types of investments by account type
Many investors are passionate about investing
Figure 39: Attitudes towards money, February 2020
Figure 40: Attitudes towards money (select), by gender, February 2020
Older consumers are less likely to prefer keeping large amounts in savings accounts
Figure 41: Attitudes towards money (select), 18-44s vs over-45s, February 2020
Affluent are more engaged investors
Figure 42: Attitudes towards money (select), by level of investments, February 2020
Money begets money
Figure 43: Attitudes towards investing (select), millionaires vs those with between $500K and $1 million in investments, February 2020
APPENDIX – DATA SOURCES AND ABBREVIATIONS
Data sources
Consumer survey data
Consumer qualitative research
Abbreviations and terms

 

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