Number of Dutch retail investors up 11% in 2020
One in five households in the Netherlands is now investing in capital markets, bringing the total of Dutch investors to 1.6 million at the end of 2020. The figure rose 11% year-on-year (or + 160,000 first-time investors) and this growth was supported in part by the corona crisis conditions according to AFM’s survey. Building up wealth is a core ambition of the Dutch novice investors as two-thirds of them cited the need for higher returns as main reason to invest. AFM’s study highlights that six out of ten beginner investors favoured execution-only trading, which is 12% more than in 2019. The Dutch regulator believes that “the emergence of user-friendly investment apps and the increasing familiarity of online services may play a role in this.”
Among the new Dutch investors, 51% are aged 18 to 34 years old while that same age group accounts for 14% of experienced investors. A trend that will likely be bolstered in next year's survey by the GameStop case as AFM had estimated in another study that 25,000 Dutch private investors had taken part to the GameStop rally. The Netherlands’ financial market authority underlines that novice investors are not only younger but also more educated than experienced investors (78% vs. 56%). Furthermore, AFM notes there were more women among the investor newbies than among experienced investors (48% vs. 24%). Nonetheless, the regulator pointed out the smaller size of assets available for investments of the newcomers in the investment world. Some 62% of them have less than € 5,000 in freely investable assets compared to 16% for experienced investors.
Significant differences in sustainability considerations
AFM’s research also flagged that sustainability is an important aspect of their portfolio for almost seven in ten Dutch investors (68%) who invest through an advisor or asset manager. Similarly, seven out of ten Dutch investors (72%) also want to be specifically informed about the extent to which their portfolio meets their sustainability preferences.
For Dutch independent investors, sustainable investing seems less of a concern as just over a third of them (36%) believe it would be a good idea for their bank or broker to ask them about their specific sustainability preferences. Some 40% of the respondents to AFM’s survey assess that this is not a task for their broker or bank while the remaining 24% argue sustainability is of secondary importance when they invest.
In both groups, younger investors are more attached to sustainability than their older counterparts. The same goes for newbie investors compared to experienced investors.