The first major survey of the public perception towards financial services organisations in Australia has identified the Future Fund as having the most favourable sentiment.
It was closely followed by global fund manager Blackrock, which was ranked second as at the end of the March quarter this year.
Despite often negative sentiment towards banks, National Australia Bank (ASX:NAB) and Westpac (ASX:WBC) ranked third and fourth, followed by global fund manager Vanguard in fifth.
The first four saw increased positive public perception over the first quarter of this year. The laggards in terms of sentiment included Perpetual. NAB’s sponsorship of AFL helped increase its general perception, while the Future Fund’s medical research fund and aboriginal activities strongly contributing to an increase in brand equity (despite some negative media coverage).
The SR Network Investor Perception Ranking was undertaken for wealth management industry search specialists Super Recruiters and its research arm SR Network and used artificial intelligence to assess social media interactions around the world (in this case Australia) to assess sentiment.
“The research ranked major fund and superannuation managers along with the big banks in order of how investors and the wider public perceive them,” said Cathy Doyle, Chair of SR Network and Super Recruiters.
Solving a major investment challenge
Ms Doyle said the research resolved the major investment challenge of measuring market sentiment and determining why some investors favour one stock over another, rather than follow fundamentals.
“We have recently seen stocks, such as buy now pay later stocks, rise much more than investment experts predicted. By looking at investor perception these movements become obvious. Determining what the public, employees, investors think of – and feel towards – an organisation can have a huge impact on it and its future, as well as its share price.
”This also enables fund managers to de-risk their portfolios by underweighting stocks that have negative and downward trending investor sentiment,” Ms Doyle said. “Up until now, it has been hard to identify let alone measure investor perception. Artificial intelligence is making that much easier and can apply a real time and even forward-looking measure of the importance of public perception to make more informed decisions, asset by asset. This is the column on the spreadsheet that many fund managers have been looking for.”
Ms Doyle added: “Investor sentiment is more of a major investment factor than ever before. We have seen a market behaviour driven by emotions, Covid, BLM, ESG and more. Some of these emotional issues are damaging stocks and funds’ performance. Fund managers have not been able to quantify these factors – until now.
“The solution is to de-risk by quantifying the susceptibility of assets to emotion,” she says. “Fund managers can now apply a real time overlay of investor sentiment to make more informed decisions, asset by asset,” she said. “Determining what the public, employees, investors think of – and feel towards – an organisation can have a huge impact on it and its future, as well as its share price.”
The research was undertaken in January and April 2021.