Analysing investment product choice in South Africa under the investor lifecycle

Figures & data

Figure 1. Stages of Big Data analysis (Source: EY (Ernst & Young), 2014)

Figure 2. Risk vs. return per asset class

Source: Compiled from Travers (2004).

Figure 3. Logarithmic scale representation of investors per product type

Table 1. Distribution of amounts invested

Statistical measure	Cash amount	Equities amount	Unit trusts amount	Total investment amount
Mean	48 801.13	106 415.50	332 501.10	55 826.70
Median	2 044.18	5 058.50	115 560.20	2 224.90
Variance	52 402 100 000	267 644 000 000	491 697 000 000	71 115 500 000
Standard deviation	228 914.95	517 342.90	701 210.75	266 674.86
Skewness	14.56	9.04	5.22	13.71
Kurtosis	309.26	97.30	32.63	260.66
Minimum	0.01	3.18	504.75	0.01
Maximum	7 289 199.86	7 205 594.93	5 482 868.45	7 289 199.86

Table 2. Parameter estimates for linear regression

Dependent variable	Parameter	DF	Estimate	Standard error	t-value	Pr > |t|
Cash	Intercept	1	−75,516	5035.71	−15	<.0001
	Age	1	2842.502	111.0144	25.6	<.0001
Equities	Intercept	1	−11,938	2837.194	−4.21	<.0001
	Age	1	415.2035	62.54716	6.64	<.0001
Unit trusts	Intercept	1	−6737.55	1630.131	−4.13	<.0001
	Age	1	222.5489	35.93693	6.19	<.0001

Figure 4. Average amount invested per product by each gender

Figure 5. Investment products per investor based on income level

Table 3. Cross-tabulation of race and investment products

Race	Cash investors		Equity investors		Unit trust investors
	Investors	Value	Investors	Value	Investors	Value
African	12,588	309 411 189	278	4 253 196	106	27 388 432
Coloured	1124	55 233 612	76	2 651 261	11	2 985 441
Indian	1061	107 562 947	131	16 736 156	10	2 259 897
Other	130	12 581 024	15	2 694 806	0	0
White	4278	451 265 682	615	92 317 865	44	24 223 920
Total	19,181	936 054 455	1115	118 653 284	171	56 857 690

Table 4. Parameter results for cash investment amount

Parameter	DF	Estimate	Std error	t-value	Pr > |t|
Intercept	1	−323,698	42,539	−7.61	<.0001
African	1	70,811	11,907	5.95	<.0001
Coloured	1	77,857	22,500	3.46	0.0005
Indian	1	78,188	21,480	3.64	0.0003
Other	1	−83,929	50,400	−1.67	0.0959
White	0	0	.	.	.
Age * African	1	8726.1123	923.370424	9.45	<.0001
Age * Coloured	1	8944.91451	1006.741368	8.89	<.0001
Age * Indian	1	9944.90044	989.803526	10.05	<.0001
Age * Other	1	13,616	1405.069649	9.69	<.0001
Age * White	1	11,275	907.378062	12.43	<.0001
Female * High income	1	205,516	53,260	3.86	0.0001
Female * Low income	1	242,463	43,222	5.61	<.0001
Female * Medium income	1	218,471	45,315	4.82	<.0001
Female * Wealthy	1	−190,107	66,649	−2.85	0.0043
Male * High income	1	90,156	49,093	1.84	0.0663
Male * Low income	1	235,778	43,425	5.43	<.0001
Male * Medium income	1	104,921	45,141	2.32	0.0201
Male * Wealthy	0	0	.	.	.
Age * Female * High income	1	−6746.00865	1168.579664	−5.77	<.0001
Age * Female * Low income	1	−7955.8814	923.556209	−8.61	<.0001
Age * Female * Medium income	1	−7085.32258	971.759925	−7.29	<.0001
Age * Female * Wealthy	1	5113.40345	1427.399352	3.58	0.0003
Age * Male * High income	1	−3678.24652	1065.073102	−3.45	0.0006
Age * Male * Low income	1	−7919.29848	930.142013	−8.51	<.0001
Age * Male * Medium income	1	−4243.81734	967.150239	−4.39	<.0001
Age * Male * Wealthy	0	0	.	.	.

Table 5. Parameter results for equities investment amount

Parameter	DF	Estimate	Std error	t Value	Pr > |t|
Intercept	1	−60,502	18,721	−3.23	0.0012
High income	1	−11,834	21,899	−0.54	0.5889
Low income	1	58,362	19,009	3.07	0.0021
Medium income	1	34,393	19,823	1.73	0.0828
Wealthy	0	0	.	.	.
Age * High income	1	2034.8	258.2258	7.88	<.0001
Age * Low income	1	74.411	72.54956	1.03	0.3051
Age * Medium income	1	769.85	143.0681	5.38	<.0001
Age * Wealthy	1	3189.9	400.5744	7.96	<.0001

Table 6. Parameter results for unit trust investment amount

Parameter	DF	Estimate	Std error	t-value	Pr > |t|
Intercept	1	−6737.548706	1630.130929	−4.13	<.0001
Age	1	222.548871	35.936929	6.19	<.0001

Table 7. Percentage invested per life cycle phase

Phase in investor life cycle	Low risk products	Medium risk products	High risk products
Accumulation	92%	1%	7%
Consolidation	83%	4%	13%
Spending/Gifting	84%	6%	10%

Source: Author compilation

Figure 6. Product risk level according to the investor life cycle

EY (Ernst & Young). 2014. Big data – changing the way business compete and operate. Retrieved September 16, 2019, from https://www.ey.com/Publication/vwLUAssets/EY_-_Big_data:_changing_the_way_businesses_operate/%24FILE/EY-Insights-on-GRC-Big-data.pdf

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