Macquarie University and moomoo have launched a national research study to investigate how sustainable trading education and transparency of company social responsibility credentials influence Australian investor behaviour.
The industry-first study will examine the behaviour of multiple groups of investors to determine how face-to-face education and exposure to a company’s ESG score influence a person’s decision to invest.
ESG, or Sustainable, Responsible, and Impact-based (SRI) investing, has grown in popularity in recent years as a result of a global shift toward more socially conscious behaviour.
Professor Tom Smith, one of Australia’s leading finance academics and a leading expert in Environmental Finance at Macquarie University, is conducting extensive research on ESG investing. According to Professor Smith’s observations, it is still unclear to what extent an organization’s social responsibility influences Australian retail investors, and what barriers prevent retail investors from engaging in impact investing.
Professor Smith stated that they understand the importance of a company’s financial performance in investor decisions, but there isn’t enough information in Australia to truly understand the role of a company’s ESG performance in the decision process.
“This is an industry-first study that will examine the growing global trend towards being more socially conscious and what we expect of organisations, from both an institutional and retail investor perspective.”
“This study will help us to better understand the drivers and barriers affecting socially conscious investor behaviour – and shed insight on how decisions change when investors have greater knowledge of where their money is really going.”
Over a three-month period, participants will trade ASX and US stocks in moomoo’s simulated trading environment, which reflects actual trading conditions with real market inputs.
Macquarie University researchers will compare the behaviour of a controlled group of participants to that of other cohorts of investors, with varying levels of intervention, as part of the study.
These interventions will include education and training sessions on why and how to conduct SRI investing, as well as how to obtain information on an organization’s social impact.
Futu Holdings’ Head of Global Strategy and CEO of Australia, Steve Zeng, believes the company is uniquely positioned to collaborate with the university on this study because it can quickly adapt its platform to accommodate any of the study’s recommended changes, if necessary. The moomoo app is supported by strong technological innovation capabilities, and its research and development team accounts for roughly 70% of the total workforce at moomoo and its parent company Futu. Their platform’s powerful investment and analysis tools will provide Macquarie University with insightful and real-time data to help them understand the effects of ESG reporting in a simulated trading environment. They want to better understand what influences investor behaviour decisions and whether an organization’s social impact should be more accessible to investors as part of their commitment to responsible investing. They are aware that, on a global scale, ESG-ranked stocks are gaining popularity, in some cases irrespective of their performance, indicating a growing preference for ESG/SRI investing.
According to moomoo’s analysis of trading behaviour amongst its US customers, the proportion of investors trading and holding ESG-focused stocks has trended up each quarter in the last two years.
Furthermore, the number of investors holding ESG stocks increased at a rate that was more than double that of all investors.
Since its March launch in Australia, moomoo has been rapidly expanding its presence and assisting Australian investors to practise responsible investing through the sharing of investing knowledge and market insights via its platform. Moomoo is a technology-driven investment and trading platform that provides Australians with access to global markets, real-time market data, and visualised company financial analysis.
