Why Australian women are creating their own paths to wealth
Female investors are on the rise, and they’re managing the markets their own way
Female investors are on the rise, and they’re managing the markets their own way
T hey’re young, they’re women and they’re ethically motivated – they are the new face of investing.
While the COVID pandemic was a growth period for new investors in general – there were more than three times as many new investors during 2020 than before – young female investors were already there.
They had been closing the gender investor gap long before we donned face masks and lined up for Covid vaccinations. Women make up 45 per cent of all new investors, according to the ASX Australian Investor Study 2020 – that’s a 31 percent increase in the past decade. And they’re not stopping there; women account for 51 percent of those who plan to invest.
“Females aged 55-plus are the group that have had the biggest growth in homelessness and I think hearing things like this in the media has made young women feel that they need to do better in the long run,” says Elizabeth Moran, director of the Australian Investors Association. “Young women are very connected and these types of conversations are constantly happening among them.”
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The chat is happening mostly via social media, with the rise of ‘finfluencers’, says Andy Darroch, an independent financial adviser with Advise Me Today.
“These finfluencers have had a huge impact,” he says of the growing rate of young female investors. “Social media as a whole, but fundamentally podcasts, has been largely responsible for getting these conversations going amongst young females.”
There’s people like financial advisor Victoria Devine from the popular podcast She’s on the Money, whose tagline reads “one stop destination for millennials who want financial freedom…without skimping on brunch.” Sydney content producer Queenie Tan has a YouTube channel called Invest with Queenie where she shares her journey to financial freedom with her almost 35,000 subscribers. Rounding out the trio is Kate Campbell with her multimedia platform, How To Money, that includes podcasts, articles and an active online presence.
But just as we have seen with the beauty and the health and fitness industries where non-professionals were often giving advice outside their abilities and qualifications, so too with finfluencers.
While some of these queens of finance social media are accredited financial advisors, some are just sharing their personal journey. And ASIC has warned followers need to be wary of who they’re getting their financial advice from.
The ASIC Young People and Money survey found 33 percent of 18 to 21 year olds follow at least one financial influencer on social media and a further 64 percent
had changed at least one of their financial behaviours as a result.
Also growing is the number of finance apps have come onto the market to make investing easier.
“For 40 years the formula for independent success was save up, buy a house, rinse and repeat,” says Darroch. “But with house prices growing at one percent a month, you can’t do that anymore and people are looking elsewhere for a new formula for success.
“But the (finance) industry makes it so complicated – there’s over 40,000 investment options for your super alone. Tech-reduced barriers like apps are helping people navigate this complicated world.”
Pearler and eToro are two popular apps which promise to make investing easier.
But a new kid on the block is the Blossom app, co-founded by millennial Gaby Rosenberg, which promises to plant a tree in a bushfire-affected region for every new account opened. While anyone can use it, it’s clearly marketed towards millennial females with an ESG focus.
An environmental focus is something that resonates strongest with women, says Anil Sagaram, founder and CEO of Acacia, a free app that allows users to upload their financial information to find new options for their savings, energy, superannuation and home loans that are more financially rewarding and sustainable.
“The bushfires, floods and the pandemic have driven an accelerated awareness of social issues,” Sagaram says. “And sustainable propositions is something that really resonates with young women.”
Chris Dixon, a partner who led the charge, says he has a ‘very long-term horizon’
Americans now think they need at least $1.25 million for retirement, a 20% increase from a year ago, according to a survey by Northwestern Mutual
Competitive pressure and creativity have made Chinese-designed and -built electric cars formidable competitors
China rocked the auto world twice this year. First, its electric vehicles stunned Western rivals at the Shanghai auto show with their quality, features and price. Then came reports that in the first quarter of 2023 it dethroned Japan as the world’s largest auto exporter.
How is China in contention to lead the world’s most lucrative and prestigious consumer goods market, one long dominated by American, European, Japanese and South Korean nameplates? The answer is a unique combination of industrial policy, protectionism and homegrown competitive dynamism. Western policy makers and business leaders are better prepared for the first two than the third.
Start with industrial policy—the use of government resources to help favoured sectors. China has practiced industrial policy for decades. While it’s finding increased favour even in the U.S., the concept remains controversial. Governments have a poor record of identifying winning technologies and often end up subsidising inferior and wasteful capacity, including in China.
But in the case of EVs, Chinese industrial policy had a couple of things going for it. First, governments around the world saw climate change as an enduring threat that would require decade-long interventions to transition away from fossil fuels. China bet correctly that in transportation, the transition would favour electric vehicles.
In 2009, China started handing out generous subsidies to buyers of EVs. Public procurement of taxis and buses was targeted to electric vehicles, rechargers were subsidised, and provincial governments stumped up capital for lithium mining and refining for EV batteries. In 2020 NIO, at the time an aspiring challenger to Tesla, avoided bankruptcy thanks to a government-led bailout.
While industrial policy guaranteed a demand for EVs, protectionism ensured those EVs would be made in China, by Chinese companies. To qualify for subsidies, cars had to be domestically made, although foreign brands did qualify. They also had to have batteries made by Chinese companies, giving Chinese national champions like Contemporary Amperex Technology and BYD an advantage over then-market leaders from Japan and South Korea.
To sell in China, foreign automakers had to abide by conditions intended to upgrade the local industry’s skills. State-owned Guangzhou Automobile Group developed the manufacturing know-how necessary to become a player in EVs thanks to joint ventures with Toyota and Honda, said Gregor Sebastian, an analyst at Germany’s Mercator Institute for China Studies.
Despite all that government support, sales of EVs remained weak until 2019, when China let Tesla open a wholly owned factory in Shanghai. “It took this catalyst…to boost interest and increase the level of competitiveness of the local Chinese makers,” said Tu Le, managing director of Sino Auto Insights, a research service specialising in the Chinese auto industry.
Back in 2011 Pony Ma, the founder of Tencent, explained what set Chinese capitalism apart from its American counterpart. “In America, when you bring an idea to market you usually have several months before competition pops up, allowing you to capture significant market share,” he said, according to Fast Company, a technology magazine. “In China, you can have hundreds of competitors within the first hours of going live. Ideas are not important in China—execution is.”
Thanks to that competition and focus on execution, the EV industry went from a niche industrial-policy project to a sprawling ecosystem of predominantly private companies. Much of this happened below the Western radar while China was cut off from the world because of Covid-19 restrictions.
When Western auto executives flew in for April’s Shanghai auto show, “they saw a sea of green plates, a sea of Chinese brands,” said Le, referring to the green license plates assigned to clean-energy vehicles in China. “They hear the sounds of the door closing, sit inside and look at the quality of the materials, the fabric or the plastic on the console, that’s the other holy s— moment—they’ve caught up to us.”
Manufacturers of gasoline cars are product-oriented, whereas EV manufacturers, like tech companies, are user-oriented, Le said. Chinese EVs feature at least two, often three, display screens, one suitable for watching movies from the back seat, multiple lidars (laser-based sensors) for driver assistance, and even a microphone for karaoke (quickly copied by Tesla). Meanwhile, Chinese suppliers such as CATL have gone from laggard to leader.
Chinese dominance of EVs isn’t preordained. The low barriers to entry exploited by Chinese brands also open the door to future non-Chinese competitors. Nor does China’s success in EVs necessarily translate to other sectors where industrial policy matters less and creativity, privacy and deeply woven technological capability—such as software, cloud computing and semiconductors—matter more.
Still, the threat to Western auto market share posed by Chinese EVs is one for which Western policy makers have no obvious answer. “You can shut off your own market and to a certain extent that will shield production for your domestic needs,” said Sebastian. “The question really is, what are you going to do for the global south, countries that are still very happily trading with China?”
Western companies themselves are likely to respond by deepening their presence in China—not to sell cars, but for proximity to the most sophisticated customers and suppliers. Jörg Wuttke, the past president of the European Union Chamber of Commerce in China, calls China a “fitness centre.” Even as conditions there become steadily more difficult, Western multinationals “have to be there. It keeps you fit.”
Chris Dixon, a partner who led the charge, says he has a ‘very long-term horizon’
Americans now think they need at least $1.25 million for retirement, a 20% increase from a year ago, according to a survey by Northwestern Mutual