Investor confidence falls but Sharesies deposits twice as high as withdrawals

Online investment platform Sharesies says confidence is low, but deposits are right up and investors are buying into funds to deal with market uncertainty.

The Sharesies Index for the third quarter shows investor confidence fell 14 points into the cautious range to 31, on a 100-point scale from concerned to extremely confident.

But co-founder and co-chief executive Leighton Roberts said by the end of September deposits were twice as high as withdrawals.

Investors preferred buying managed and exchange-traded funds, which are considered less volatile than equity shares.

He said it is an unusual dynamic the app has not experienced before but it shows investors have changed their behaviour to cope with turbulent economic conditions.

"There's been lots of interest rate discussions, there's clearly war still and there's a big election over in the US, so we think we're just seeing people prepare for that.

"But at the same time it seems people are depositing more into their portfolios to be ready once they've got a bit more certainty on some of these, and certainly ready to take advantage of different types of assets once cash rates and deposit rates continue to drop."

Roberts said Rocket Lab moved up the index meaning there are now three US tech stocks, Tesla, Apple and Rocket Lab, ranked in the top five.

He said mood around the US Election in November is playing a role in that with people putting a large amount of money into American shares.

That pushed some New Zealand companies down the index but overall, there was not much change.

"The big movers on the downside, we did see companies like Mainfreight and Spark move down the index a little bit.

"But with regards to companies that did very well we have Rocket Lab, which is held by about 3 percent of investors on the platform, move up and it's now sitting in the top five. That kicked Auckland Airport out of the top five but still the funds tend to be remaining quite stable across the board and a lot of money going into those funds," said Roberts.

He said he expects there to be an uptick in investment in equity shares in the fourth quarter with interest rates falling in New Zealand and rate discussions on going in Australia.