The Wellington-based online investment platform, Sharesies is sounding out the Australian market for possible expansion.
Brooke Roberts, co-founder of Sharesies, said the firm was currently recruiting for an Australian country manager.
“We are looking at launching Sharesies in Australia,” Roberts said. “But at the moment we’re working on a product that might fit the market there.”
The business created the Sharesies AU Group company (equally owned by the three founders Brooke Roberts, Leighton Roberts and Sonya Williams) late in November this year, after forming Sharesies Group (wholly owned by Leighton Roberts) the previous month. However, the Sharesies NZ operating business features over 20 owners, including the founders.
Australia is well-served with direct share-trading platforms, including the recently launched Superhero but she said Sharesies was gathering information on Australian investor preferences to help refine an offering that might find a niche across the Tasman.
The company has seen phenomenal growth in its home country since launching from a standing start in 2017 as a direct-to-consumer fund platform. In its first two years of operation Sharesies signed up about 20,000 members, pitching to first-timers especially with a low minimum investment requirement.
But since early 2019, and particularly since the COVID-19 crisis, Sharesies has seen hyperbolic growth, hitting over 150,000 members earlier this year.
“We’ve got about 250,000 members and $850 million under management now,” Roberts said.
In fact, all direct-to-consumer investment platforms in NZ including InvestNow and Hatch (which deals in US shares only) saw membership spike considerably this year, in line with offshore trends.
The start-up Auckland online passive fund provider, Kernel Wealth, also reported a bumper 2020 with assets under management on track to surpass $100 million, according to founder, Dean Anderson.
Anderson said Kernel had seen substantial flows into its recently launched global equity funds from direct retail clients, as well as strong support across its six-product set from the advisory sector.
In November, Kernel completed a $1.5 million capital-raise to fund its growth that has seen staff numbers jump to 10, including two new hires – head of technology, and head of digital.
Julian Knights, founding partner of Australian private equity concern, Ironbridge, has also joined the Kernel board following his recent move to Queenstown.
While Kernel is a low-cost passive product manufacturer, Sharesies is in the distribution game. Starting with a small suite of index funds in 2017, over the last couple of years Sharesies has added direct local share trading (joining the NZX as an accredited broker) and earlier this year US equities.
Next cab off the rank is direct ASX stocks, a move Roberts said is imminent.
“We’ll be adding the ASX next year,” she said.
Gemma Dale, director investor behaviour at bank-owned broking business nabtrade, told Australian trade publication The Inside Adviser in November, that the new influx of online share traders appeared to have made sensible choices during the 2020 market volatility.
Dale said the top 10 stocks for retail clients on nabtrade were: three of the banks – NAB, Westpac and ANZ; three travel stocks – Qantas, Flight Centre and Webjet; two technology stocks – Zip Co and Afterpay Touch; and BHP and the Vanguard ETF for the ASX 200.
“This is the kind of portfolio that your mum would tell you to buy,” she told the publication. “It doesn’t feel like a highly speculative portfolio… The percentage of buys in the trades was about 80 per cent (20 per cent sells), so the tendency was to buy and hold.”
Similar to the Australian direct investor experience during COVID, Sharesies members stayed cool during the March market panic, Roberts said.
A recent Sharesies survey, carried out by research house Colmar Brunton, found many Kiwi investors, particularly those on its platform, were piling more into the market during the coronavirus era.
“… some seem to be investing more with 17% of New Zealanders (non-Sharesies customers) and more than half (53%) of Sharesies customers saying they’re investing more since Covid,” the NZ consumer survey says.
“We also found people saying they will buy more shares when there is a dip in the share market (23%), which is up from 13% in 2019 and 12% in 2018. For Sharesies customers, 44% said they’d be keen to invest in more shares if things took a turn again.”
Roberts said the bulk of Sharesies members tend to be buy-and-hold investors rather than day-traders.
While membership ages on the platform range between “zero and 97”, she said the average Sharesies investor is under 40, lending weight to the secular shift of the Millennial generation to online investing.
Part-owned by NZ second-hand goods platform TradeMe, Sharesies has recently completed another capital-raise to spearhead the next phase of growth. Staff numbers have grown from 40 at the beginning of this year to more than 100 at the latest count, Roberts said.
As an aside, TradeMe filled the NZ niche ignored by eBay, which dominates the online second-hand goods market in many jurisdictions, including Australia. While TradeMe remains a local concern, the success of online accounting business, Xero, in Australia shows some Kiwi firms, with a little pluck, can transplant across the Tasman.