BOOST: We’ve seen a structural increase in the number of retail investors, and their exposure to stocks, as they take control of their financial futures. An unsung driver of this increase is the 2019 rollout of fractional share ownership. Alongside the rise of online investment platforms, community, free trading, and the continued growth of the $10 trillion ETF industry, it has made investing more accessible, lower cost, and encouraged diversification. Analysis shows this impact is unsurprisingly greater for younger investors and among higher priced stocks. US stock markets, the Swiss SMI, France’s CAC-40 and Germany’s DAX have the highest priced individual stock and the priciest median one, and would benefit most from its growing popularity.
STOCKS: We look at 15 of the world’s biggest stock markets (see chart). The S&P 500 index homebuilder NVR (NVR) is the highest priced single share at $5,385, followed by Swiss fragrance giant Givaudan (GIVN.ZU) at equal to US$3,100. Switzerland’s main SMI index has the priciest median stock at $240, followed by price-weighted Dow Jones Industrials at $155. By contrast Hong Kong’s Hang Seng has the lowest of the ‘highest price’ stocks in the Hong Kong Exchange (00388.HK), and the broad Australian market the lowest median price at under $2/sh.
DATA: The availability of fractional share ownership has real consequences. Consider that the median DIY investor portfolio, per our retail investor beat survey, is only around $35,000. And for those under 35 it is just $10,000. Additionally the average price of the ten most widely held stocks by retail investors, from Tesla (TSLA) to PayPal (PYPL), on eToro is a very high $182. Data shows fractional ownership availability driving a 50% increase in ownership of stocks with prices over $100. We are now starting to see efforts to extend to other assets like fixed income.
All data, figures & charts are valid as of 26/10/2023.