The State of the Australian Investor 2026

Executive Summary

The 2026 State of the Australian Investor report marries qualitative survey data from the largely self-direct and engaged retail investors within the Morningstar community with quantitative portfolio, performance and transaction data from an overlapping and expanded group of retail investors using Sharesight for portfolio tracking and management. This unique view of Australian retail investors shows both the mindset and behaviour of this population.

You can find the PDF version of the report here.

Report key findings

• Investors are cautious, but remain pragmatic and continue to take advantage of perceived opportunities.
• A structural shift in retail portfolios continues with Exchange Traded Funds (ETFs) becoming the core building blocks of investor portfolios while individual shares are transitioning to satellite holdings.
• Retail investors have generated strong average returns but behaviour influences results with investors who trade more frequently earning lower median returns.
• Income remains a priority for individual investors with recent changes to capital gains tax likely increasing the appeal of income strategies.
• Home bias is persistent in Australian portfolios but there is evidence to suggest its prevalence may be overstated given the limited data on the asset allocation of ETFs which are increasingly used to gain global exposure.

The Australian investor of 2026 is best described not as bullish or bearish, but as cautious and engaged. The Morningstar community is concerned about geopolitics, inflation, economic recessions, the cost of living, market volatility and changes to the tax environment. A significant portion of these investors classify themselves as cautious.

Yet these concerns don’t translate into a broad retreat from markets. During the major market shocks from the last several years, retail investors continued to take advantage of perceived opportunities and were net buyers during market shocks. On the busiest trading day of each of the three shocks examined, buys exceeded sells by roughly two to one.

This gap between sentiment and action indicates the pragmatic long-term approach of many investors, which is likely influenced by the continued resilience of equity markets since the pandemic. Investors have been conditioned to see market drops as temporary opportunities to take advantage of lower prices. They continue to ‘buy the dip.’

A structural shift continues in the way investors access markets with ETFs becoming the default building block of the retail portfolio. While strong fund flows into ETFs is widely reported the extent of this structural change in markets may be masked by data on overall portfolio holdings.

Direct shares still represent 51.50% of overall portfolios but it is likely that this is influenced by legacy positions. New investors allocate a higher percentage of their portfolio to ETFs at 40% compared to 26.20% for the overall population. Across the entire population of portfolios the four most widely held securities are all ETFs and transaction data shows ETFs dominate ongoing retail investor purchases.

The emerging retail portfolio looks to be hybrid: diversified ETFs form the core, while individual companies are used to express conviction. The buy-to-sell ratios reinforce this interpretation. ETF purchases outnumbered ETF sales by 3.2 - 5.4 times, varying by quarter. For individual shares, the ratio remained tightly clustered between 1.5 and 1.7 times. ETFs look increasingly like accumulate-and-hold positions; individual stocks are where investors are more willing to revise views based on market conditions.

The changing nature of investor portfolios is influenced by the market environment. Strong overall returns have been driven by the largest companies and market capitalisation indexes have become increasingly top- heavy. This market environment is dovetailing with persistent evidence that active stock pickers struggle to beat the market.

In response, retail investors are turning to passively managed ETFs. Established investors are steadily shifting their portfolios to a core/satellite approach. New investors without legacy positions and significant unrealised capital gains begin with core ETF holdings and build their satellite.

Many investors are shifting to global markets which have outperformed the Australian market since the global financial crisis. ETFs are the vehicle of choice for many retail investors to gain global exposure. This global shift is evident in the strong average returns retail investors have enjoyed over the past two financial years which far surpassed the local market.

However, the average returns were not enjoyed by all investors. Investor behaviour played a large role with returns consistently falling as investors traded more.

Finally, retail investors are focusing on the income component of total returns. The proportion of total returns stemming from income indicates that investors are intentionally seeking income-producing investments. This is likely reflective of several concerns voiced by the Morningstar community including the impact of tax and the overall geopolitical environment.

What this report measures

What does the Australian investor look like today?

Investors are navigating a complex environment. Higher living costs, changing interest rates, geopolitical uncertainty, tax and superannuation policy changes and an increasingly complex investment landscape. At the same time, the return environment has been strong, with the investment product industry providing cheap and effective exposure to an increasingly diverse set of asset classes. Investors have access to more information than ever before.

This report looks to explore how retail investors in Australia are responding to this complex landscape. The State of the Australian Investor brings together four different sets of insights to provide a holistic view of the Australian investor:

The State of the Australian Investor provides a unique view of Australian investors by following the path from intention to action by using these four sets of insights.

An example of the interplay between intention and action is how investors react to market corrections. Survey data indicates investors are cautious but 93% would either hold or buy during a correction of 10% or more. During volatile markets content consumption rises as investors seek information to understand market movements. Investors are not just seeking information but also acting. Transaction data from Sharesight shows trading levels increasing during these periods. On days with increased volatility, investors are taking advantage of perceived opportunities as buys exceed sells by roughly two to one.

This sequence tells us substantially more than any individual statistic. It suggests that caution is not equivalent to paralysis and despite a measured outlook investors are not capitulating during meaningful selloffs. Investors can feel uncertain, consume more information and still conclude that the appropriate action is to maintain or increase exposure.

Who is the Australian investor?

The Morningstar community is an experienced and financially engaged cohort of investors. Around 65% of respondents had been investing for more than 20 years, while only around 5% had been investing for three years or less. Around 69% reported at least $1 million invested, excluding the home and including superannuation. About 63% said they make their investment decisions completely themselves, with another 21% making most decisions themselves.

The report is not principally describing a novice investor discovering markets for the first time. It reflects the views of people with substantial exposure to financial markets and a high degree of self-direction.

The Sharesight data broadly reinforces this picture as their cohort of retail investors are actively engaged in tracking their portfolios.

The sample may not be representative of the broader Australian investing population but indicates how engaged investors view and manage their portfolios. A growing number of Australians meet this criteria. In the latest ASX Investor Study, the number of Australian investors holding investments outside of a house and superannuation grew from 9 million in 2020 to 10.2 million in 2023. That is equivalent to more than half of the Australian adult population. In addition, 22% of on-exchange investors had started investing in the previous two years.

There is also an important distinction between engagement and activity. The median investor made only five trades in FY2026. The distribution of trading activity is highly skewed: a relatively small active group accounts for a disproportionate share of transactions.

One driver of the low median number of annual trades may be knowledge and engagement. There is significant evidence that over-trading leads to poor outcomes which is frequently cited in Morningstar content. This is also consistent with surveyed investors view of themselves. When asked, the Morningstar community believes that they have the knowledge and temperament to make good decisions self-ranking themselves at 73 out of 100.

This view is also consistent with faith in retirement outcomes with 78% of investors confident they have enough for retirement and 94% knowing exactly or roughly how much income they will need in retirement.

The Australian investors surveyed and observed are engaged with their financial future and confident in their path.

Part One: Sharesight portfolio and performance data

Portfolio characteristics

A strong year for portfolio performance

The equal-weighted mean return fell only modestly, from 13.9% to 13.3%, but the median fell from 13.0% to 11.0%. The dollar-weighted mean fell from 13.7% to 11.7%, while the weighted median fell from 13.2% to 9.7%. Over the two years measured, the share of portfolios finishing with positive returns declined from 87.0% to 82.4%.

A small group of very strong portfolios can keep the mean relatively high even as the median investor has a weaker experience. That is important for understanding the survey’s cautious mood. A person can observe that markets and many portfolios delivered double-digit gains while simultaneously experiencing more volatility or a lower personal return.

The mean portfolio return of 13.3% meaningfully exceeded the 2.6% rise in the ASX 200 over FY2026. That comparison should not be interpreted as evidence that investors systematically beat the market through skill.

The portfolios contain international assets, income, currency exposure and different risk profiles, while the ASX 200 is a single domestic equity benchmark. The average portfolio underperformed the S&P 500 which achieved 21% over the same time period. Yet the fact remains that the investor population had strong outcomes in a year when the domestic headline index was comparatively subdued and outperformed most large, diversified growth-oriented industry super funds.

Generating income from portfolios is one of the most consistent themes across the data. Dollar-weighted portfolio returns were 13.7% in FY2025 and 11.7% in FY2026, with income contributing 3.6 and 4.1 percentage points respectively. The size of the income component compared to dividend yields suggests investors are actively seeking income producing securities. This is consistent with strong editorial interest in dividends and income-oriented strategies.

Australian investors have substantial exposure to companies and funds that distribute income which plays multiple roles in investor portfolios, particularly in retirement. Income provides several benefits for retirees including a mechanism to convert assets to cash while lowering sequencing and longevity risk. There has also been renewed interest in income strategies as capital gains tax changes have caused investors to reassess the after-tax returns of different investment strategies. The tax focus was a recurring theme in the survey through both quantitative and qualitative measures, reinforcing that this is front of mind. With the tax changes announced in May, next year’s study will reveal if this sharp focus on tax strategies wanes as time passes.

On the most traded securities front, Vanguard Australian High Yield ETF’s (ASX: VHY) rise from 14th to 9th is consistent with this broader indication of interest in the strategy. Survey data and content consumptionis consistent.

One significant insight from separating the active traders from the population was that the typical return falls as trading frequency rises. Median returns declined at every step up the trading frequency ladder – as trading increases, outcomes get progressively worse. This is true for both FY2025 AND FY2026.

The investors making up more than 100 trades had a median portfolio value of $314,683 in FY2026, compared with $58,966 for the investors who made no trades. They also held a median of 97 investments, compared with a median of 9 for the investors that did not trade. The heavy traders were not those with small portfolio balances making negligible trades.

In FY2026, investors that made more than 100 trades had a median return of 9.6% but an equal-weighted mean of 14%. For the overall cohort, the median was 11.2% and the mean was 13.4%. This shows that the most active cohort contained some very strong performers, but the typical investor did worse. The 95th percentile return for the cohort that traded over 100 times was 57.6%, compared with 46.6% for the broader investor population.

Light traders had the highest probability of finishing with positive returns. Some trading may be compatible with good outcomes, but very high trading activity is associated with both lower typical returns and a lower probabilityof finishing the year ahead.

The Sharesight data also found that the heavy traders sold more often as well. Over 94% of the cohort withover 100 trades sold at least once during FY2026, and sells are one third of their trades.

The top four common holdings in portfolios both years were all passive ETFs - Vanguard Australian Shares Index ETF (ASX: VAS), Vanguard MSCI Index International Shares ETF (ASX: VGS), iShares Core S&P 500 ETF (ASX: IVV) and Betashares NASDAQ 100 (ASX: NDQ). While less popular than ETFs, common share holdings were familiar Australian companies including BHP Ltd. (ASX: BHP), Commonwealth Bank of Australia (ASX: CBA), CSL Ltd. (ASX: CSL) and Woodside Energy Group Ltd. (ASX: WDS).

Nine of the top 20 FY2026 holdings were ETFs, up from seven in FY2025. Changes in rankings reveal investor interest: Betashares Global Shares ETF (ASX: BGBL), Perth Mint Gold Structured Product (ASX: PMGOLD), Global X Semiconductor ETF (ASX: SEMI), Arafura Rare Earths Ltd (ASX: ARU), WiseTech Global Ltd (ASX: WTC) and CSL Ltd. (ASX: CSL) climbed, while names such as Mineral Resources Ltd (ASX: MIN), Betashares Crypto Innovators ETF (ASX: CRYP) and A2 Milk Company Ltd (ASX: A2M) fell.

Holdings data indicates investors may be gravitating to portfolios that combine broad-market building blocks with targeted exposures to themes, companies and defensive assets.

The rankings of popular holdings reflects ownership rather than trading frequency. A security can be widely held without being frequently traded, which is one reason the ownership and trading data should be viewed in conjunction to provide a holistic view of investor actions. The holdings data may indicate that commonly held shares are legacy positions, given their historical outperformance.

The overlap at the top between ownership and trading is revealing of investor intent: Vanguard Australian Shares Index ETF (ASX: VAS), Vanguard Msci Index International Shares ETF (ASX: VGS), iShares S&P500 AUD ETF (ASX: IVV) and Betashares Nasdaq 100 ETF (ASX: NDQ) are core holdings investors are actively accumulating.

The presence of BHP Group Ltd (ASX: BHP), Commonwealth Bank of Australia (ASX: CBA), CSL Ltd (ASX: CSL)and Woodside Energy Group Ltd (ASX: WDS) immediately after the ETF leaders shows that Australian investors have not abandoned domestic companies. The data reveals that portfolios appear barbelled between broad diversification and conviction in individual companies.

The movement in rankings also demonstrates that ‘most popular’ is not static. CSL Limited’s and WiseTech Global Limited’s rise and the increased visibility of gold-related securities suggest that investors continue to rotate their attention while maintaining a stable core of passive ETFs.

This is backed by the engagement statistics on Morningstar. For FY26, Global X Physical Gold Structures (ASX: GOLD) was the most searched listed security, with various exposures to gold and silver included in the most searched securities. Individual companies including Fortescue (ASX: FMG) and CSL Ltd. (ASX: CSL) attracted attention. ETFs had a strong showing.

The mix is revealing because it does not fit a single market narrative. Investors were simultaneouslyinvestigating core portfolio exposures, individual thematic opportunities, and defensive or alternative assets. That suggests investors were solving several problems at once: diversification, return generation, protection and tactical positioning.

Importantly, this engagement did not indicate a purchase signal. An investor may research gold becausethey’ve heard about strong performance or are worried about inflation or geopolitics, then decide not to get exposure. Likewise, a company may receive substantial page views because its share price has fallen andinvestors are assessing whether the decline is an opportunity. Interest and conviction are different.

Direct shares still dominate portfolios by percent allocation, but ETFs continue to make up larger portions of investor portfolio

Direct shares represented 51.5% of portfolio value in FY2026, down slightly from 51.9%. ETFs rose from 22.6% to 26.2%, a 3.6% percentage point increase. Managed Funds fell from 8.2% to 6.7%, custom investments (unlisted or investments unsupported by Sharesight) dropped from 14.7% to 13.4%, while other investments marginally fell from 1.9% to 1.8%, and crypto from 0.6% to 0.4%. Portfolio ownership rates tell a similar story: 64.2% held ETFs, while 76.0% held direct shares.

Sector exposure: the direct-share portfolio remains recognisably Australian

This dataset looks at the sector exposure of portfolios which resembles the broader Australian market. The indirect underlying exposure of funds and ETFs are not included, therefore, the dataset does not reflect the actual portfolio exposure. Financial services remained the largest sector but declined from 28.0% to 25.8%. Non-energy minerals rose from 15.6% to 19.1%, while electronic technology (companies that manufacture electronic equipment, components, semiconductors and hardware) increased from 4.9% to 6.8%. Technology services and health technology declined.

The reduction in finance services exposure is noteworthy because Australian retail portfolios have historically been heavily exposed to banks and financials. This may partly be due to active allocation decisions, but performance is an obvious contributor. The increase in non-energy minerals suggests stronger relative representation of mining exposures, while the rise in electronic technology points to greater interest in technology-related Australian listings, perhaps after the success of US counterparts which have driven market performance in US and international-focused collective investments.

Part Two: Holdings, allocations and trading behaviour

Trends

Investors continue to turn to ETFs. Across all portfolios (including those that hold no ETFs), the average number of individual ETF holdings increased from 2.26 to 2.45. Among investors who held at least one ETF, theaverage rose from 3.60 to 3.82. The share of portfolios holding an ETF increased from 62.7% to 64.2%.

The rise of ETFs has been a well-documented trend across the industry. This report confirms this trend, with astructural shift visible in three separate measures – ownership, allocation and trading. ETF ownership rose; the share of a portfolio’s value allocated to ETFs rose; and investors who hold at least one ETF tend to allocatea large share of their portfolio to ETFs. These are mutually reinforcing signals.

The allocation-depth table shows how deeply some investors are committing to ETFs. In FY2026, the median ETF holder allocated 77.5% of their portfolio to ETFs, compared with 69.0% for the median direct-share holder. The middle 50% of ETF holders ranged from 33.2% to 100%; for direct shares the range was 23.3% to 100%. Funds, crypto and other investments had much lower median allocations. This is strong evidence that ETFsare often core holdings rather than small satellite positions.

Over two years, investors holding only ETFs increased from 21.7% to 23.6%. Investors holding only individual shares fell from 32.2% to 27.0%, while investors holding both increased from 44.7% to 48.1%. Mixed portfolios are more common but the role ETFs play in the average portfolio is increasing.

The survey also revealed that ETFs are front of mind for investors. When asked what an investor would do if they had $10,000 to invest tomorrow, the most common answer was ETFs. This further reinforces the point that investors may have legacy portfolios holding direct equities but are increasingly turning to ETFs for newcontributions to their portfolios.

When asked about interest in different topics, ETFs were the second most popular answer with over 14% of respondents expressing interest in learning more about the investment vehicle. This reinforces a trend in increasing interest in Morningstar’s ETF content.

Portfolio holdings data shows that portfolios new to the FY2026 eligible population have portfolio compositions more weighted towards ETFs than the overall population. These portfolios held a median of five securities versus six, yet ETFs represented 40% of their overall value, compared with 26.2% for the established base. Newer investors have smaller portfolios and fewer securities, but a larger proportion invested through ETFs. Without legacy positions of individual shares, the increasing investor preference for ETFs comes through.

Hybrid investing strategies

Across all eight quarters, ETF buys outnumbered ETF sells by between 3.2 and 5.4 times. For individual shares, the ratio remained tightly clustered between 1.5 and 1.7. The ratio for ETFs declined over time, from 5.4 in September 2024 to 3.2 in June 2026, but remained strongly buy dominant. In the median month, 4.2 times as many distinct portfolios bought ETFs as sold them, opposed to 1.4 times for individual shares.

This is one of the strongest pieces of behavioural evidence in the report. Portfolio composition tells us ETFs are increasingly important and the buy vs. sell data tells us how investors use them. The latter suggests accumulation rather than frequent repositioning.

There is a simplistic narrative that classifies investors as either active security selectors using individual shares or a passive investor that captures the market return. Portfolio data shows that investors don’t neatly fall into the active or passive camp. An investor can use ETFs for long-term broader exposure while simultaneously buying individual companies when they have conviction in a specific opportunity.

Home bias remains strong at the surface level

Australia accounted for 85.1% of country of listing exposure in FY2026, down from 85.9%. The US rose from11.9% to 12.7%, while the UK was broadly unchanged. The important caveat is that country of listing is not thesame as market exposure: an ASX-listed ETF holding international companies is classified as Australian by listing market. Return data indicates Australians are increasingly turning to global markets.

Australian investors can look heavily domestic based on holdings while increasing underlying international exposure. VGS, IVV and NDQ are top holdings for investors, providing international exposure. Many Australian domiciled multinational companies have significant revenue streams from foreign economies. As thepopularity of ASX-listed international ETFs grows, this data set becomes a less useful proxy for geographic or market exposure in portfolios.

Cautious investors are still putting money to work

The typical investor made 5 trades in both FY2025 and FY2026. The average across all eligible investors increased from 30.6 to 41.7, while the share of investors trading at least once fell from 73.2% to 71.6%. Total voluntary trades increased from 3.38 million to 4.07 million, or about 21%. The increase was driven by a new cohort of heavily trading portfolios entering the population rather than greater intensity among investors who were already trading.

Importantly, the ‘cautious’ signal from the survey does not mean ‘inactive’. The proportion of investors trading fell slightly, but total trading volumes rose sharply.

Market corrections brought investors into the market

Three volatile windows were explored to see if investor behaviour differed:

• the August 2024 global sell-off
• the 1 February–11 April 2025 tariff/AI-driven fall, and
• the 25 February–30 March 2026 Iran War period.

August 2024 was an anomaly in average daily trades in an acute window. Average daily trading was 45% above ordinary days in August 2024, 6% above normal during the tariff episode and 10% above normalduring the Iran War window. Buys per sell remained around 2.25, 2.26 and 2.03 respectively, versus 2.12 on ordinary days.

In long-running bull markets investors can become conditioned to view market dips as opportunities. The post-Covid period after 2020 is an example of this market environment.

The survey responses confirmed investors’ view that event driven volatility is an opportunity. This pattern is evident in the trade volume during these volatile periods. Trading volume rose but was heavily weighted to buying.

The daily trading view shows the nature of investor response differed by event. In August 2024 there was a sharp spike in activity followed by a rapid normalisation. During the tariff episode trading activity gradually increased and culminated around 7–10 April 2025 before dropping sharply. The Iran War period produced amore contained increase. The common feature was buy volume remained well above sell volume.

This pattern is evident on the peak days:

• On 5 August 2024 there were 18,308 buys and 9,665 sells.
• On 7 April 2025 there were 23,388 buys and 12,576 sells.
• On 9 March 2026 there were 16,652 buys and 8,196 sells.

In each case, buying exceeded selling by roughly two to one.

A rise in volume could mean panic selling, speculative buying, tax-driven rebalancing or a mixture of behaviours. The direction of the imbalance shows that, at least in aggregate, the dominant response frominvestors was not to panic, but to attempt to capitalise on perceived opportunities.

This aligns with survey responses that the emotion that influences most investors’ investment decision is desire for gains. Trading volumes rose during volatility, but investors were focused on opportunities. This desire for gains is typical investor behaviour after a long bull market.

The August event was particularly concentrated: four trading days averaged 45% above normal, with threeappearing in the two-year top 30 by activity. The tariff episode was slower and more prolonged as there was uncertainty about the ultimate outcome. The 50-trading-day window averaging only 6% above normal butended in a concentrated burst when President Trump was perceived to have backed down. This demonstrates that a ‘market correction’ is not a uniform event - the speed and narrative of the specific event impacts investor responses.

Market shocks increased participation more than concentration

The monthly chart tracks the number of distinct investors who placed at least one trade. 10 of the 30 busiest days of investor participation fell inside the three event windows.

• 7 April 2025 – immediately following reciprocal tariff announcements, was the busiest day overall, with 12,188 portfolios with at least one transaction and 35,964 overall trades (2.95 trades per portfolio);
• 5 August 2024 was second with 10,267 portfolios with at least one transaction and 27,973 trades (2.72 trades per portfolio);
• 4 April 2025 had 9,088 portfolios with at least one transaction and 24,605 trades (2.71 trades per portfolio).

Trades per portfolio remained within the normal 2.2–3.0 range. This indicated broadened participation rather than overall volume being driven by a small minority of investors. One interpretation is that a market shock can create a broad wave of participation without creating erratic or volume-based behaviour. It results in a distributed response rather than an increase in trading intensity.

Part three: Morningstar State of the Investor Survey

Investor sentiment and behaviour

How investors anticipate behaving during market volatility

The survey shows investors behaved in the same way they anticipated. When asked what they would do during a market correction of 10% or more, 52% said they would hold their existing investments and 41% said they would buy more. Around 4% said they would sell some investments and fewer than 1% said they would sell everything.

However, the survey also exposes the limits of intention - we don’t always do what we say we will do. 45% said they had previously regretted selling an investment during pronounced volatility, while 44% said they had delayed investing because they were waiting for a market crash. Among those who delayed, only around 52% subsequently thought that was the right decision.

Investors understand the principle of buying or holding through corrections, but they also experienced the emotional challenges of doing so. The transaction data shows that investors are changing their behaviour during times of market volatility, mainly to take advantage of perceived opportunities.

Investor sentiment: cautious, but not fearful

Cautious was clearly the dominant response in the survey, followed by confident and neutral. Optimistic andexcited were much less common, while concerned and anxious formed a smaller but meaningful group.

The survey question asks about emotional state but that doesn’t translate into action. An investor can be cautious about geopolitical risks and still believe equities are attractive over a long horizon. There is always uncertainty and it is understandable investors are feeling cautious given the market and economic environment, tax changes, geopolitical unrest, and the transformative opportunity (and threat) of AI. Investors feel uncertainty and are still prepared to act.

While some Australians may not be investing given the uncertain environment this is not evident intransaction data. This may be investors understanding investing is key to achieving their financial goals while taking a more pragmatic view that the returns they need will not be achieved without growth assets.

This leads to Morningstar’s community showing a Morningstar Confidence Score of 72 for FY2026. This was an indicator of self-perceived confidence in their financial future at 72.

Investors remain focused on geopolitical uncertainty

Geopolitical tensions are the largest current concern, selected by more than 52% of respondents. Inflation followed at 48%, recession risk at 42%, cost of living and sharemarket volatility at about 40%, and tax at 35%. Asked which concerns had become more important over the previous year, geopolitical tensions again led at 46%, followed by cost of living (ability to maintain a standard of living) at 36%, inflation (economy-wide prices that have long term impacts on financial goals) at 33% and tax at 33%.

Given the breadth of concerns - there is no one clear winner. Investors are not focused on one variable and are monitoring the impact of overseas conflict, inflation, household finances, market volatility and government policy into their investment thinking.

Share market volatility or market corrections were the most commonly cited influence on investment decisions by 46% of respondents, followed by the Australian Federal Budget at 41%. This was followed by geopolitical conflicts at 35%, company earnings at 25%, changes to superannuation policy at 23% and Reserve Bank interest-rate changes at around 20%. The chart shows that investors are responding to both market events and policy information.

The prominence of the Federal Budget is especially important. It shows that investors are not interpreting markets in isolation from public policy. Tax and superannuation changes can alter expected after-tax returns, contribution strategies and portfolio decisions, making government announcements investable information rather than merely political news.

Tax was also selected as a significant current concern by about 35% of survey respondents, and 33% said it had become more important over the previous year. Morningstar content consumption showed a similar pattern, with high-performing articles on the new tax regime, tax consequences of international investing, trusts, capital gains and superannuation. Podcast engagement also showed interest in tax-efficient investing.

This represents a meaningful change in framing. Investors are increasingly focused on investments that leavethem with the best after-tax outcome instead of the highest gross returns. Tax consequences can change the attractiveness of otherwise similar investments and impact decision making on realising capital gains, selecting investments, asset placement across structures and managing retirement income.

Interest-rate expectations: investors adjust the whole balance sheet

The survey shows that changing rate expectations impacted more than investment selection. Increasing cash savings, including in an offset account, was a popular response from investors. Buying dividend-paying shares and fixed income were also a common reaction along with buying ETFs, de-risking portfolios and delaying investment. A substantial group made no changes. The distribution demonstrates that investors respond to higher interest rates through both their investment portfolio and household balance sheet.

This is particularly relevant to Australian households because mortgage debt and offset accounts can make the household balance sheet an investment decision in its own right. The findings reinforce the need to avoid treating an investor as a portfolio-only decision-maker. When rates change, investors alter cash holdings,debt repayment, fixed income exposure, equity risk and property views concurrently. There are multiple levers for Australian investors to choose from, and the content engagement through Morningstar shows that they have an increasing interest in holistic guidance.

Retirement maintains investor attention

Morningstar’s Retirement Confidence Score sits at 78 for FY26. The survey indicates relative confidence about retirement, but also identifies specific worries: market downturns, healthcare costs, aged care, inflation andsupporting family members. Content consumption patterns show continuing interest in superannuation,retirement income and how much investors need to retire.

The relatively high score for retirement confidence is likely linked to understanding their goal. 94% ofrespondents ‘roughly know’ or ‘know’ how much income that they need in retirement.

The portfolio data adds context. These investors have substantial portfolios. ‘Not saving enough’ and ‘running out of money’ are not the primary concerns. Instead there are worries that unknown costs or volatility will derail the comfortable retirement they have planned. Uncertainty is the major retirement concern which maybe closely linked to the strong interest in income investing strategies that may offer a sense of security.

The State of the Australian Investor

Shani Jayamanne

Director, Investment Specialist, Morningstar Australia

Shani Jayamanne is the author of the report. She is a co-host of Morningstar Australia’s Investing Compass podcast, and co-author of personal finance book Invest Your Way. She is a frequent contributor of personal finance insights in major publications in Australia. Shani has spent her career working in financial services, across financial advice and large asset managers. Her work has focused on understanding financial products, and distilling complex financial concepts.

Sharesight

Sharesight is a portfolio tracking platform that brings your investment data together in one place. Performance insights, dividend forecasting and tax reporting tools deliver deeper insights to self-directed investors and professionals alike for smarter investment decisions. www.sharesight.com

Sharesight provided the aggregate portfolio, performance and transaction statistics from a sample of its active Australian investor base used in The State of the Australian Investor 2026 report.

The appendix for this report can be foundin the PDF, including methodology and population, definitions, and more descriptive data.