Are investors losing patience with the flat conditions we continue to see from many world stock markets? While the US posted a strong month of returns in July – and is now in positive territory for the year as a whole – markets in Europe and Asia largely lagged behind, falling back in many cases. And data from Dianomi reveals that demand from investors for online asset classes on the leading asset classes also dipped significantly last month.
Looking across four major asset classes – equities, fixed income, real estate and commodities – Dianomi registered an 11% decrease in investors’ consumption of online financial content in July compared to June. This was the first time in four months that page impressions on the sites tracked by Dianomi fell back.
While some of the slippage may be accounted for by the summer season, the data also points to diminishing appetite for asset class-specific coverage amongst investors consuming online financial content. Such coverage accounted for 25% of the content consumed last month, compared to 29% in June.
The decline was most noticeable in investors’ consumption of equity-related content, which accounted for 18.5% of all the financial coverage consumed last month – compared to 22% in June. Investors accessed 16% less content on equities in July compared to the previous month.
This is a significant departure from the experience of the first half of the year, when the turmoil in the financial markets prompted investors to seek out equity-related content online. In particular, consumption of such content spiked higher in March, as equity markets fell sharply as the realities of the pandemic became apparent, and in June, as investors focused on the opportunities that recovery potentially offered.
However, with the recovery in markets outside of the US appearing to run out of steam over the summer months – and in July in particular – investors’ appetite for equity-related content has diminished. Both content focused on execution of investment – featuring key words such as trading or share dealing – and on market outlook fell last month.
Dianomi’s analysis does suggest investors are continuing to focus on individual opportunities that the pandemic might throw up. Significantly, consumption of equity-related content focused on biotech and healthcare continued to grow strongly in July, following a trend established in May and June. Investors continue to seek out potential winners from the pandemic in these sectors.
More broadly, however, equity-related content has been of less interest to investors over the past month. Instead, investors have been more inclined to seek out content on other asset classes.
Fixed income, in particular, saw a 15% increase in content consumption on the sites tracked by Dianomi in July. Though most fixed-income assets offer little in the way of yield during this ongoing period of remarkably low interest rates, bond markets have stabilised over the past three months, prompting positive returns amid interventions from central banks.
Investors’ growing appetite for fixed-income content last month may be a reflection of this stabilisation, with many continuing to seek safe-haven assets amid the uncertain outlook. The search for yield also remains a prominent theme.
Commodity-related content also saw increased consumption last month, with investors accessing 10% more coverage of this asset class than in June. The rising gold price, which hit a new all-time high in July, no doubt accounts for at least some of this increased interest. Gold’s status as a safe haven asset continues to attract attention in these turbulent times, with investors accessing almost three times as much content on the precious metal in July as in June – though consumption of oil-related coverage also more than doubled.
Investors will continue to need a broad range of financial content in the weeks and months ahead as they attempt to navigate a course through the unchartered waters of the pandemic. The day-to-day impact of Covid-19 on asset prices remains highly unpredictable and investors will need expert analysis and insight to help them interpret a fast-moving situation.
Dianomi’s analysis suggests that for now at least, investors are less focused on equity markets to the exclusion of other asset classes than they have been in recent months. Fixed-income assets and commodities have moved up the agenda against the current market backdrop. Responding to this shift will be crucial to give investors the support they so badly require.
