LONDON – Digital usage among investors accelerated in 2020 and digital sources are now driving more trading decisions and investment recommendations than ever before, according to new research conducted by Brunswick Group.

Driven by the pandemic, institutional investors changed the way they worked in 2020, and are now more reliant on digital tools to connect and collaborate: in a global survey of 537 institutional investors with total size of assets under management between US$10m-$50m, 99% of investors said they used digital sources to investigate an issue, while 80% said what they discovered on digital sources impacted their investment decisions.

As an appendix to its annual Digital Investor Survey, Brunswick also surveyed institutional investors in the US, UK and Canada in February to assess their views after Reddit community r/WallStreetBets captured the investment world’s attention in January. Its members collaborated to squeeze short sellers and drive up the share prices for a range of stocks, most notably retailer GameStop.

The digital team found that while use of Reddit by investors had increased five points since the primary survey in November, trust in the platform declined from a mean score of 3.3 out of 10 to a new low of 2.0. Meanwhile, use of r/WallStreetBets was up six points, but there was no corresponding increase for other Reddit forums such as r/personalfinance or r/investing.

The action also made Reddit the least trusted source among investors surveyed: 54% of respondents scored Reddit either a 1 or a zero on trust in February, compared to 27% in November.

Nevertheless, one in five institutional investors said that they made a trade, changed a recommendation or altered a position as a result of activity originating in r/WallStreetBets, and younger investors in particular were more likely to see the story as significant and a precursor of lasting changes.

Looking at the most frequently used and trusted sources by investors, the survey found that company-provided investor relations websites are the most used and most trusted sources of information for investors.

On trust, IR websites topped Bloomberg, the FT, and all other traditional news sources. 92% of investors report using the investor relations section of a company’s website to investigate an issue, and 72% say they have made an investment decision based on something they learned there.

Brunswick Group digital partner Marshall Manson said: “This presents a significant opportunity for companies looking to do a better job connecting with their largest investors: IR sites have not kept up with the furious pace of change in communications that has played out over the last decade.

“Companies should review their IR sites with an eye towards providing richer content and a more personalised experience, targeting their visitors interests more effectively, and providing a steady supply of relevant material.”