AI use in trading jumps 20% in 18 months, but its future remains uncertain

New research released today from global financial technology company IG reveals Australian traders are demonstrating unprecedented concern about geopolitical tensions, but remain optimistic about Australian stocks.

The latest data from IG’s most recent A Trader’s Position report reveals 60% of traders cite geopolitical uncertainty as their number one concern. This concern rose sharply from 50% (December 2024) and is the highest level recorded to date since the survey began tracking in 2022.

Amid continued global tensions and the impact of US tariff announcements, IG’s June 2025 survey reveals Australian investors are pulling back from US markets, with the proportion investing in US assets dropping from 25% in Dec 2024 to just 15% in Jun 2025. This marks the lowest level recorded in the past 18 months, possibly reflecting concerns over US market volatility.

Key Findings from A Trader’s Position:

• Index Uncertainty: The proportion of traders who are unsure which index will experience the highest growth rose sharply from 15% in Dec 2024 to 25% in Jun 2025.

• Domestic focus: Australian investors continue to favour domestic shares, with local portfolio allocation rising from 55% in Dec 2024 to 62% in June 2025.
  • 72% of traders expect growth in the ASX over the next 6 months. IG Traders’ expectations of the Australian share market have risen steadily (28 percentage points) since June 2022

• Inflation less concerning: Concern about inflation has declined from 56% in June 2024 to 37% in June 2025, while recession concerns have dropped from 55% in Dec 2023 to 39% in June 2025.

• Rise of AI: In June 2025, AI-related industries were once again identified as the predicted sector of highest growth across Australia (47%) reaffirming strong investor confidence in the long-term potential of artificial intelligence across all core markets.

• Defence an increasing interest: Among Australian investors, the Defence and Military sector has seen a sharp rise in interest – up from 27% in Dec 2024 to 42% in June 2025, reflecting growing confidence in defense-related industries as a strategic investment opportunity.

• ESG Interest grows: The proportion of Australian traders who consider ESG factors important in their investment decisions rose to 41% in June 2025, rebounding to levels last seen in December 2023 (42%).

Michael Jones, Managing Director at IG Australia, says geopolitical instability is influencing Australian traders’ investment strategies with the Australian market being one of the beneficiaries.

“Despite the uncertainty, there’s been a notable rise in interest and confidence in the Australian market, coinciding with a drop in interest in the US market. Index uncertainty rose 10 percentage points in Jun 2025, while 72% of investors expect growth in the ASX over the next 6 months, the highest optimism recorded since tracking began,” Jones said.

The report notes steady growth in ETF trading by Australian investors, so much so it is becoming a core component of Australian investors’ strategies, with ETF trading rising from 32% in June 2024 to 40% in June 2025.

“We also saw a decline in riskier assets like cryptocurrencies (down 4 points) and currency trading (down 6 points) since Dec 2024. Meanwhile, commodities have steadied, dropping by a point from December 2024, suggesting a slow in interest in perceived safe-haven assets,” said Jones.

A Trader’s Position provides valuable insights into the shifting attitudes and behaviours of investors, helping IG to track client sentiment and better understand how traders are navigating an increasingly fast paced and volatile market environment.

“As Australian traders continue to adapt, IG Australia remains committed to delivering the platform investors need to engage confidently with the market. Our new $0 Commission structure for both domestic and international shares on an IG Share Trading account with instant conversion set up is the perfect example of this,” said Jones.