Equities and funds are gaining popularity

Equities and funds are gaining popularity
Equities and funds are gaining popularity
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When investing for the future, Austrian households continue to rely on flexibility and security while accepting lower returns on their investments. As current data provided by the Austrian National Bank (OeNB) shows, although financial assets in investment funds and listed shares are increasing, only a few are taking advantage of more attractive earnings opportunities.

In June, the total financial assets of private households and non-profit organisations in Austria amounted to EUR 715.4bn. This means that financial assets grew by 3.9 per cent in the first half of the year. By far the largest portion of this (165.3bn) by households is in the form of overnight deposits, which increased by 4.0 per cent. The share of cash also rose by 1.3 per cent to EUR 23.9bn. This continues a trend that has been observed over a longer period of time. While the share of these asset classes remained relatively stable compared to the rest of Europe, it has risen from 31 per cent to 43 per cent in Austria over the past ten years.

private household assets

Private securities still low

However, the asset components of Austrian private households that have recently seen the strongest growth were listed shares and investment certificates. In the first half of the year, the volume of shares in private portfolios increased by 12.9 per cent to EUR 26.2bn, while that of investment certificates increased by 7.8 per cent to EUR 64.7bn.

Despite the strong growth, however, tradable securities (investment funds, bonds and listed shares) continue to play only a minor role, accounting for only 17 per cent of total private portfolios. According to the National Bank, less than one tenth of the population hold investment certificates, only 5 per cent are shareholders and only 3 per cent own bonds.  Last year, an additional 400 million euros were invested in tradable securities, but this accounted for only about 3 per cent of so-called capital formation.

Return potential remains untapped

By comparison, EUR 12.2bn or 85 per cent of the newly invested funds were invested in overnight deposits and cash. However, households did not make profits with it: “Even the extremely poor earnings – between 2015 and 2018, this form of investment produced a negative real return of – 1.3 per cent– did not change the high preference of households for liquid funds,” the OeNB stated in a press release.

For tradable securities – i.e. investment certificates, bonds and listed shares largely neglected by Austrians – the statisticians of the National Bank, on the other hand, show a positive real return of 1.1 per cent.

 

 

 

 

 

Legal note:
Prognoses are no reliable indicator for future performance.

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Legal disclaimer

This document is an advertisement. All data is sourced from Erste Asset Management GmbH, unless indicated otherwise. Our languages of communication are German and English.

The prospectus for UCITS (including any amendments) is published in Amtsblatt zur Wiener Zeitung in accordance with the provisions of the InvFG 2011 in the currently amended version. Information for Investors pursuant to § 21 AIFMG is prepared for the alternative investment funds (AIF) administered by Erste Asset Management GmbH, pursuant to the provisions of the AIFMG in connection with the InvFG 2011.

The fund prospectus, Information for Investors pursuant to § 21 AIFMG, and the key investor document/KID can be viewed in their latest versions at the web site www.erste-am.com within the section mandatory publications or obtained in their latest versions free of charge from the domicile of the management company and the domicile of the custodian bank. The exact date of the most recent publication of the fund prospectus, the languages in which the key investor document is available, and any additional locations where the documents can be obtained can be viewed on the web site www.erste-am.com. A summary of investor rights is available in German and English on the website www.erste-am.com/investor-rights as well as at the domicile of the management company.

The management company can decide to revoke the arrangements it has made for the distribution of unit certificates abroad, taking into account the regulatory requirements.

This document serves as additional information for our investors and is based on the knowledge of the staff responsible for preparing it at the time of preparation. Our analyses and conclusions are general in nature and do not take into account the individual needs of our investors in terms of earnings, taxation, and risk appetite. Past performance is not a reliable indicator of the future performance of a fund. Please note that investments in securities entail risks in addition to the opportunities presented here. The value of shares and their earnings can rise and fall. Changes in exchange rates can also have a positive or negative effect on the value of an investment. For this reason, you may receive less than your originally invested amount when you redeem your shares. Persons who are interested in purchasing shares in investment funds are advised to read the current fund prospectus(es) and the Information for Investors pursuant to § 21 AIFMG, especially the risk notices they contain, before making an investment decision. If the fund currency is a currency other than the investor's home currency, changes in the corresponding exchange rate may have a positive or negative impact on the value of his investment and the amount of the costs incurred in the fund - converted into his home currency.

Please consult the corresponding information in the fund prospectus and the Information for Investors pursuant to § 21 AIFMG for restrictions on the sale of fund shares to American citizens. Misprints and errors excepted.