August 29, 11:41 am
Over the past ten years, the assets under the management of the digital investments market have increased tenfold, rising from $290 million in 2017 to $2.87bn last year. The entire market is expected to continue growing in the following years, with more people than ever using online brokers, robo advisors and trading apps to make investments.
According to data presented by AltIndex.com, the assets under the management of the digital investments market are expected to surge by 63% and hit over $5.2trn value by 2027.
The global investment industry has undergone significant changes in the past decade, with technological improvements bringing new services and changing how people invest. Thanks to robo advisors, neobrokers, and trading apps, they can invest in stocks, bonds, and other assets without actively managing their portfolio, with algorithms adjusting their risk preferences, making data-driven decisions, and maximizing returns. This more convenient way of trading, which offers a wider range of investment options and lower fees, has drawn millions of people to the market.
According to Statista Digital Market Insights, between 2017 and 2022, more than 232 million people have started using robo advisors and neobrokers pushing the total value of assets under the management (AUM) in the digital investments market to record highs. Last year, the global AUM in digital investments came to $2.87trn, showing an eye-popping 890% increase in five years.
Statista expects this figure to hit $3.22trn in 2023 and then jump to $5.27trn by 2027. Robo-advisors, the market's largest segment, will see nearly a 70% growth in this period, with the total AUM rising from $2.76trn to $4.66trn. Neobrokers will see only half that growth, with the total value of assets increasing by roughly 30% to $610bn by 2027.
In global comparison, the United States will remain a leader in digital investments and see the strongest growth in the next four years. Last year, the US had over one trillion in assets under the management of the digital investments market, one-third of the world's total. Statista expects this figure to grow by a CAGR of 13.2% in the next four years, resulting in a market volume of roughly $2trn by 2027.
Europe comes in second with a projected five-year CAGR of 11.9% and AUM in the digital investments segment rising from $909bn to $1.42trn. Due to regulatory restrictions imposed on robo-advisory services, China's growth in digital investment AUM is set to plummet from 2023 onward. Statistics show that the Chinese market volume plunged by 88% year-over-year to only $51bn in 2023. Although this figure is expected to rise to $86bn by 2027, that's still five times less than last year.
The efficiency, speed, and low service fees in the digital investments space will continue driving impressive user growth. Over the past five years, the number of users in the market surged by nearly 600%, jumping from 38.4 million to more than 256 million.
Statista expects more than 65 million people to join the digital investments space in the next four years, pushing the total user count to all-time highs. By 2027, more than 321 million people will use robo-advisors, neobrokers, and trading apps.
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The information provided by AltIndex is solely for informational purposes and not a substitute for professional financial advice. Investing in financial markets carries inherent risks, and past performance doesn't guarantee future results. It's crucial to do your research, consult with financial experts, and align your financial objectives and risk tolerance before investing. AltIndex creators and operators are not liable for any financial losses incurred from using this information. Users should exercise caution, seek professional advice, and be prepared for the risks involved in trading and investing in financial assets, only investing what they can afford to lose. The information in this application, derived from publicly available data, is believed to be reliable but may not always be accurate or current. Users should verify information independently and not solely rely on this application for financial decisions. By using AltIndex, you acknowledge that it doesn't offer financial advice and agree to consult a qualified financial advisor before making investment decisions.
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