The number of Australians directly owning shares has fallen to the lowest level in more than a decade as the global financial crisis belted confidence and sapped returns.
The Australian Share Ownership Study, run by the Australian Securities Exchange, shows the proportion of the population directly owning shares has fallen to 34 per cent, from 39 per cent in 2010.
Total share ownership, which includes exposure to the sharemarket through unlisted managed funds, has fallen to 38 per cent, from 43 per cent.
But despite the decline, Australia continues to have one of the world's highest levels of exposure to equities, with 6.7 million people participating in the market either directly or through their super funds.
The ASX study has been running since 1991. It shows investors have become more self-reliant in recent years, with more people saying they want to be in control of their portfolios. The desire for control coincides with the rise in popularity of self-managed super funds, and the wont to reduce fees.
But more people admit that they are "not at all knowledgeable" about the way the market works.
Investors have become more cautious and self-reliant, the report says.
Most investors (61 per cent) expect to maintain the present proportion of their funds in shares during the next 12 months (up from 52 per cent in 2010).
The report also shows the average value of trades has dropped by 11 per cent to $12,730 in recent years. At the same time the average value of funds invested fell to $139,380 from $163,885 two years ago.
Even so, recent gains in the sharemarket - which occurred after the survey was conducted - have translated to growing confidence among investors.