European retail interest in investing surges
With the popularity of pension funds dwindling, many Europeans, especially younger ones, have taken up investing during the pandemic as a way to secure their retirement and accumulate additional funds.
For example, last year in the Netherlands a total of 1.75 million households had investments in stocks and investment funds, an increase of 17 per cent compared to 2019. In the UK, four in 10 investors have cut their spending during the pandemic to fund their investments in traditional assets like stocks and bonds. In Germany, the number of people owning shares increased by 2.2 million to 12.4 million, with the highest growth among 30-year-olds and younger.
At the same time, thematic ETFs in Europe gathered over EUR3.1 billion during the first half of 2020, compared to EUR1.1 billion in the whole of 2019.
Europeans also look positively at alternative assets like loans. In 2020, Mintos, the EU-leading alternative investment marketplace for investing in loans, saw its annual lending increase by 86 per cent to EUR5.6 billion (EUR6.2 billion currently). On top of that, last year the company saw the number of female investors grow by 43 per cent, with the overall number of investors now totalling almost 393 000, a significant part of them from Germany.
“It is very encouraging to see Europeans recognising the power of investing,” says Martins Sulte, CEO and Co-founder of Mintos. “Stocks, bonds and ETFs make the foundation of traditional investing, and alternative assets like loans offer a great opportunity to diversify one's portfolio. While the number of investors has increased significantly, it is only scratching the surface. With good education and accessibility to various assets and markets, the true potential of a European investor is to be revealed in the near future.”
Furthermore, a recent survey by Mintos, which holds 40 per cent of the market share in the EU, showed that 67 per cent of investors are confident that their current investments in loans across all platforms they use will bring the return they expect this year. The majority of respondents also embrace diversification both within loans and on a broader scale, with 73 per cent saying they will continue to invest in various assets in 2021. Seventy nine per cent said that they also invest in stocks, while 70 per cent invest in ETFs.
The recent surge in investors in Europe can also be attributed to the Reddit-fuelled GameStop rally last January. Multiple brokerages in Europe have reported a sharp increase of younger investors trying to join the trading frenzy.